Network architecture, barter exchange and the diffusion of ideas

We model knowledge diffusion as agents exchanging ideas through a barter process. The model builds on empirical observations of informal knowledge trading among competing agents. The process takes place on a network substrate in which agents are nodes, and can trade only with those to whom they have direct links (edges). When two agents meet, they make a mutually profitable trade. This process repeats, and is the foundation on which knowledge diffuses through the economy. Our interest is in how the structure of the network affects diffusion performance. The extent of idea diffusion is affected both by the circumference of the graph and by local coherence: diffusion is most efficient when the network is a small world. The distribution of knowledge over agents is also most equal when networks are small worlds.