Knowledge flows and the geography of networks: A strategic model of small world formation
AbstractThis paper aims to demonstrate that the strategic approach to link formation can generate networks that share some of the main structural properties of most real social networks. For this purpose, we introduce a spatialized variation of the Connections model [Jackson, M.O., Wolinsky, A., 1996. A strategic model of social and economic networks. Journal of Economic Theory 71, 44-74] to describe the strategic formation of links by agents who balance the benefits of forming links resulting from imperfect knowledge flows against their costs, which increase with geographic distance. We show, for intermediate levels of knowledge transferability, clustering occurs in geographical space and a few agents sustain distant connections. Such networks exhibit the small world property (high clustering and short average relational distances). When the costs of link formation are normally distributed across agents, asymmetric degree distributions are also obtained.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 71 (2009)
Issue (Month): 2 (August)
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Web page: http://www.elsevier.com/locate/jebo
Strategic network formation Time-inhomogeneous process Knowledge flows Small worlds Monte Carlo simulations;
Other versions of this item:
- Nicolas Carayol & Pascale Roux, 2006. "Knowledge flows and the geography of networks. A strategic model of small worlds formation," Working Papers of BETA 2006-16, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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