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Structural holes and densely connected communities

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Author Info
Antoni Rubí-Barceló () (Universitat de les Illes Balears)

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Abstract

It has been empirically shown that structural holes in social networks enable potential large benefits to those individuals who bridge them (Burt, 2004). The pioneering paper Goyal and Vega-Redondo (2007) offers a new incentives based explanation of this phenomenon. But the main equilibrium network of their model does not display a basic empirical regularity: the architecture of social networks is characterized by the existence of densely linked communities loosely connected to one another (Granovetter, 1983). This paper analyzes the conditions under which agents who benefit from bridging structural holes can be sustained in equilibrium networks constituted by densely linked groups.

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Publisher Info
Paper provided by Universitat de les Illes Balears, Departament d'Economía Aplicada in its series DEA Working Papers with number 32.

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Date of creation: 2008
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Handle: RePEc:ubi:deawps:32

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Related research
Keywords: network formation; personal income distribution; structural holes; communities;

Find related papers by JEL classification:
D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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  1. Matthew O. Jackson & Anne van den Nouweland, 2002. "Strongly Stable Networks," Microeconomics 0211006, EconWPA. [Downloadable!]
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  2. Charness, Gary & Corominas-Bosch, Margarida & Frechette, Guillaume R., 2007. "Bargaining and network structure: An experiment," Journal of Economic Theory, Elsevier, vol. 136(1), pages 28-65, September. [Downloadable!] (restricted)
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  3. Bhaskar Dutta & Suresh Mutuswami, 1997. "Stable Networks," Tinbergen Institute Discussion Papers 97-039/1, Tinbergen Institute.
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  4. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February. [Downloadable!] (restricted)
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  5. Sanjeev Goyal & Sumit Joshi, 2006. "Bilateralism And Free Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 749-778, 08. [Downloadable!] (restricted)
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  6. Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer, vol. 34(3), pages 319-349, October. [Downloadable!] (restricted)
  7. Goyal, Sanjeev & Vega-Redondo, Fernando, 2007. "Structural holes in social networks," Journal of Economic Theory, Elsevier, vol. 137(1), pages 460-492, November. [Downloadable!] (restricted)
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