Follow the Leader: Simulations on a Dynamic Social Network

33 Pages Posted: 23 Nov 2013

See all articles by David Goldbaum

David Goldbaum

University of Technology Sydney

Date Written: October 31, 2013

Abstract

This paper introduces a process of individual adjustment based on private local experiences and observation that allows for the emergence of a global social structure that is the equilibrium to the static follow-the-leader game of Goldbaum (2013). The setting rewards agents for being early adopters of popular products or trends. From simple, myopic, self-serving adjustment based on historic evidence by individuals emerges the the equilibrium social structure consisting of a single choice leader and a population of followers, which, in the static setting would require an unlikely degree of coordination to produce. Individual actions take place in a social context with individuals linked via one-way paths of observation. The strategy by which an agent chooses among the available options evolves over time. Different adjustment emergent processes contribute towards the understanding of the unfolding of events that generate the equilibrium structure.

Keywords: Leader, Dynamic Network, Social Interaction, Consumer Choice, Simulation

JEL Classification: D85, D71, C71

Suggested Citation

Goldbaum, David, Follow the Leader: Simulations on a Dynamic Social Network (October 31, 2013). Available at SSRN: https://ssrn.com/abstract=2358566 or http://dx.doi.org/10.2139/ssrn.2358566

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