How do the network positions of the first individuals in a society to receive information about a new product affect its eventual diffusion? To answer this question, we develop a model of information diffusion through a social network that discriminates between information passing (individuals must be aware of the product before they can adopt it, and they can learn from their friends) and endorsement (the decisions of informed individuals to adopt the product might be influenced by their friends’ decisions). We apply it to the diffusion of microfinance loans, in a setting where the set of potentially first-informed individuals is known. We then propose two new measures of how “central” individuals are in their social network with regard to spreading information; the centrality of the first-informed individuals in a village helps significantly in predicting eventual adoption.
The Diffusion of Microfinance
Abhijit Banerjee, Arun G. Chandrasekhar, Esther Duflo, Matthew O. Jackson
Science 26 July 2013:
Vol. 341 no. 6144