Technology diffusion by learning from neighbours

Kalyan Chatterjee, Susan H. Xu

Research output: Contribution to journalArticle

24 Citations (Scopus)

Abstract

In this paper, we consider a model of social learning in a population of myopic, memoryless agents. The agents are placed at integer points on an infinite line. Each time period, they perform experiments with one of two technologies, then each observes the outcomes and technology choices of the two adjacent agents as well as his own outcome. Two learning rules are considered; it is shown that under the first, where an agent changes his technology only if he has had a failure (a bad outcome), the society converges with probability 1 to the better technology. In the other, where agents switch on the basis of the neighbourhood averages, convergence occurs if the better technology is sufficiently better. The results provide a surprisingly optimistic conclusion about the diffusion of the better technology through imitation, even under the assumption of extremely boundedly rational agents.

Original languageEnglish (US)
Pages (from-to)355-376
Number of pages22
JournalAdvances in Applied Probability
Volume36
Issue number2
DOIs
StatePublished - Jun 1 2004

Fingerprint

Social Learning
Integer Points
Imitation
Rule Learning
Learning
Switch
Adjacent
Switches
Converge
Line
Experiment
Experiments
Model

All Science Journal Classification (ASJC) codes

  • Statistics and Probability
  • Applied Mathematics

Cite this

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Technology diffusion by learning from neighbours. / Chatterjee, Kalyan; Xu, Susan H.

In: Advances in Applied Probability, Vol. 36, No. 2, 01.06.2004, p. 355-376.

Research output: Contribution to journalArticle

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