Small World Networks with Segregation Patterns and Brokers
AbstractMany social networks have the following properties: (i) a short average distance between any two individuals; (ii) a high clustering coefficient; (iii) segregation patterns; the presence of (iv) brokers and (v) hubs. (i) and (ii) define a small world network. This paper develops a strategic network formation model where agents have heterogeneous knowledge of the network: cognizant agents know the whole network, while ignorant ones are less knowledgeable. For a broad range of parameters, all pairwise Nash (PN) networks have properties (i)-(iv). There are some PN networks with one hub. Cognizant agents have higher betweenness centrality: they are the brokers who connect different parts of the network. Ignorant agents cause the emergence of segregation patterns. The results are robust to varying the number of cognizant agents and to increasing the knowledge level of ignorant ones. An application shows the relevance of the results to assessing the welfare impact of an increase in network knowledge due to, e.g., improved access to social networking tools.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2009.34.
Date of creation: May 2009
Date of revision:
Network; Cognitive Network; Small World; Broker; Segregation;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-28 (All new papers)
- NEP-NET-2009-07-28 (Network Economics)
- NEP-SOC-2009-07-28 (Social Norms & Social Capital)
- NEP-URE-2009-07-28 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Francis Bloch & Matthew Jackson, 2006. "Definitions of equilibrium in network formation games," International Journal of Game Theory, Springer, vol. 34(3), pages 305-318, October.
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