[SwarmFest2004] Abstract submission

[Kerimcan Ozcan]

Dear Committee members,

Per Rick Riolo's advice I am (belatedly) submitting the following abstract
of a paper, I and my coauthor Venkat Ramaswamy of Michigan Business School
are currently working on. I hope it can be accommodated within the
conference schedule.

Kerimcan Ozcan
University of Michigan

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Authors:
Kerimcan Ozcan
University of Michigan
701 Tappan Street
Ann Arbor, MI 48109
E-mail: address@hidden
Phone: (734) 668-8513
Fax: (734) 647-8133

Venkat Ramaswamy
University of Michigan
701 Tappan Street
Ann Arbor, MI 48109
E-mail: address@hidden
Phone: (734) 763-5932
Fax: (734) 936-0279

Title:

Diffusion of Innovations in Small Worlds: Taking Shortcuts While Seeding?

Whereas most research on diffusion of innovations (Bass 1969), network
externalities (Katz and Shapiro 1986), information cascades (Bikhchandani,
Hirshleifer, and Welch 1992), and fashions (Miller, McIntyre, and Mantrala
1993) require and recognize network phenomena without explicitly modeling
them or doing so under very restrictive assumptions, most research in
social network analysis facilitates the description of the "ties that bind
actors in a network" (see Wasserman and Faust 1994 for a general review)
without dynamically linking structure with concrete social processes and
individual manipulations (White, Boorman, and Breiger 1976). Subsequently,
one has to study how information flows and other transactions relate to
structural patterns and their change. This is the main objective of this
paper. In particular, we superimpose a theoretical model of innovation
adoption and word-of-mouth interaction at the micro-model onto the
small-world insight that a very small number of random, global links at
the macro-level can shrink the network drastically (Watts 1999).

We first propose a theoretical model of word-of-mouth interaction
utilizing information- and decision-theoretic conventions (Chatterjee and
Eliashberg 1990; Feder and O'Mara 1982; Jensen 1982; Roberts and Urban
1988). Next, using the small-worlds formalism proposed by Watts and
Strogatz (1998), we generate networks that are connected, have minimal
structure, are made up of unidirectional and non-valued links, and range
between a topological ring and a complete graph. Then, we utilize the
SWARM agent-based modeling platform to investigate the effects of network
size, number and distance of shortcuts, and number and collocation of seed
agents on the aggregate dynamics of innovation adoptions as mediated
through word-of-mouth traffic. We close by discussing these results and
what they imply for managerial practice.