Knowledge flows and the geography of networks: A strategic model of small world formation
This 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.
References listed on IDEAS
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.:
- Stefano Breschi & Francesco Lissoni, 2010.
""Cross-firm" Inventors and Social Networks: Localized Knowledge Spillovers Revisited,"
in: Contributions in Memory of Zvi Griliches, pages 189-209
National Bureau of Economic Research, Inc.
- Stefano BRESCHI & Francesco LISSONI, 2005. "“Cross-firm” Inventors and Social Networks: Localised Knowledge Spillovers Revisited," Annales d'Economie et de Statistique, ENSAE, issue 79-80, pages 189-209.
- Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
- Nicolas Carayol & Pascale Roux, 2004. "Behavioral Foundations And Equilibrium Notions For Social Network Formation Processes," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 77-92.
- Sanjeev Goyal & Marco J. van der Leij & Jos� Luis Moraga-Gonzalez, 2006.
"Economics: An Emerging Small World,"
Journal of Political Economy,
University of Chicago Press, vol. 114(2), pages 403-432, April.
- Sanjeev Goyal & Marco van der Leij & José Luis Moraga Gonzales, 2004. "Economics: An Emerging Small World?," CESifo Working Paper Series 1287, CESifo Group Munich.
- Sanjeev Goyal & Marco van der Leij & José Luis Moraga-Gonzàlez, 2004. "Economics: An Emerging Small World?," Working Papers 2004.84, Fondazione Eni Enrico Mattei.
- Robert P. Gilles & Cathleen Johnson, 2000. "original papers : Spatial social networks," Review of Economic Design, Springer, vol. 5(3), pages 273-299.
- Goyal, Sanjeev & Joshi, Sumit, 2003.
"Networks of collaboration in oligopoly,"
Games and Economic Behavior,
Elsevier, vol. 43(1), pages 57-85, April.
- Goyal, S. & Joshi, S., 2000. "Networks of Collaboration in Oligopoly," Econometric Institute Research Papers EI 9952-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Sumit Joshi, 2000. "Networks of Collaboration in Oligopoly," Econometric Society World Congress 2000 Contributed Papers 0623, Econometric Society.
- Andrea Galeotti & Sanjeev Goyal & Jurjen Kamphorst, 2003.
"Network Formation with Heterogeneous Players,"
Economics Discussion Papers
562, University of Essex, Department of Economics.
- Vega-Redondo, Fernando, 2006.
"Building up social capital in a changing world,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 30(11), pages 2305-2338, November.
- Robles, Jack, 1998. "Evolution with Changing Mutation Rates," Journal of Economic Theory, Elsevier, vol. 79(2), pages 207-223, April.
- Matthew O. Jackson & Brian W. Rogers, 2005.
"The Economics of Small Worlds,"
Journal of the European Economic Association,
MIT Press, vol. 3(2-3), pages 617-627, 04/05.
- Jackson, Matthew O. & Rogers, Brian W., 2005. "The economics of small worlds," Working Papers 1214, California Institute of Technology, Division of the Humanities and Social Sciences.
- Matthew O. Jackson & Brian W. Rogers, 2005. "The Economics of Small Worlds," Game Theory and Information 0503004, EconWPA.
- Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993.
"Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,"
The Quarterly Journal of Economics,
MIT Press, vol. 108(3), pages 577-98, August.
- Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
- Matthew O. Jackson & Asher Wolinsky, 1995.
"A Strategic Model of Social and Economic Networks,"
1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Cowan, R. & Jonard, N., 2003.
"The dynamics of collective invention,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 52(4), pages 513-532, December.
- Jackson, Matthew O. & Watts, Alison, 2002.
"The Evolution of Social and Economic Networks,"
Journal of Economic Theory,
Elsevier, vol. 106(2), pages 265-295, October.
- Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- Jasjit Singh, 2005. "Collaborative Networks as Determinants of Knowledge Diffusion Patterns," Management Science, INFORMS, vol. 51(5), pages 756-770, May.
- M. T. Gastner & M. E.J. Newman, 2006. "The spatial structure of networks," The European Physical Journal B - Condensed Matter and Complex Systems, Springer, vol. 49(2), pages 247-252, 01.
- Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March.
When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:71:y:2009:i:2:p:414-427. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.