IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2105.12704.html
   My bibliography  Save this paper

A Structural Model of Business Card Exchange Networks

Author

Listed:
  • Juan Nelson Mart'inez Dahbura
  • Shota Komatsu
  • Takanori Nishida
  • Angelo Mele

Abstract

Social and professional networks affect labor market dynamics, knowledge diffusion and new business creation. To understand the determinants of how these networks are formed in the first place, we analyze a unique dataset of business cards exchanges among a sample of over 240,000 users of the multi-platform contact management and professional social networking tool for individuals Eight. We develop a structural model of network formation with strategic interactions, and we estimate users' payoffs that depend on the composition of business relationships, as well as indirect business interactions. We allow heterogeneity of users in both observable and unobservable characteristics to affect how relationships form and are maintained. The model's stationary equilibrium delivers a likelihood that is a mixture of exponential random graph models that we can characterize in closed-form. We overcome several econometric and computational challenges in estimation, by exploiting a two-step estimation procedure, variational approximations and minorization-maximization methods. Our algorithm is scalable, highly parallelizable and makes efficient use of computer memory to allow estimation in massive networks. We show that users payoffs display homophily in several dimensions, e.g. location; furthermore, users unobservable characteristics also display homophily.

Suggested Citation

  • Juan Nelson Mart'inez Dahbura & Shota Komatsu & Takanori Nishida & Angelo Mele, 2021. "A Structural Model of Business Card Exchange Networks," Papers 2105.12704, arXiv.org, revised Aug 2021.
    • Handle: RePEc:arx:papers:2105.12704
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2105.12704
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shuyang Sheng, 2020. "A Structural Econometric Analysis of Network Formation Games Through Subnetworks," Econometrica, Econometric Society, vol. 88(5), pages 1829-1858, September.
    2. Babkin, Sergii & Stewart, Jonathan R. & Long, Xiaochen & Schweinberger, Michael, 2020. "Large-scale estimation of random graph models with local dependence," Computational Statistics & Data Analysis, Elsevier, vol. 152(C).
    3. Angelo Mele, 2017. "A Structural Model of Dense Network Formation," Econometrica, Econometric Society, vol. 85, pages 825-850, May.
    4. Andrea Galeotti & Luca Paolo Merlino, 2014. "Endogenous Job Contact Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1201-1226, November.
    5. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.
    6. Vincent Boucher & Ismael Mourifié, 2017. "My friend far, far away: a random field approach to exponential random graph models," Econometrics Journal, Royal Economic Society, vol. 20(3), pages 14-46, October.
    7. Angelo Mele & Lingxin Hao & Joshua Cape & Carey E. Priebe, 2019. "Spectral inference for large Stochastic Blockmodels with nodal covariates," Papers 1908.06438, arXiv.org, revised Mar 2021.
    8. Bryan S. Graham, 2017. "An Econometric Model of Network Formation With Degree Heterogeneity," Econometrica, Econometric Society, vol. 85, pages 1033-1063, July.
    9. Nicholas Christakis & James Fowler & Guido Imbens & Karthik Kalyanaraman, 2010. "An empirical model for strategic network formation," CeMMAP working papers CWP16/10, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    10. Leung, Michael P., 2015. "Two-step estimation of network-formation models with incomplete information," Journal of Econometrics, Elsevier, vol. 188(1), pages 182-195.
    11. Lori A. Beaman, 2012. "Social Networks and the Dynamics of Labour Market Outcomes: Evidence from Refugees Resettled in the U.S," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 128-161.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cornelius Fritz & Co-Pierre Georg & Angelo Mele & Michael Schweinberger, 2024. "A Strategic Model of Software Dependency Networks," Papers 2402.13375, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chih‐Sheng Hsieh & Lung‐Fei Lee & Vincent Boucher, 2020. "Specification and estimation of network formation and network interaction models with the exponential probability distribution," Quantitative Economics, Econometric Society, vol. 11(4), pages 1349-1390, November.
    2. Alex Centeno, 2022. "A Structural Model for Detecting Communities in Networks," Papers 2209.08380, arXiv.org, revised Oct 2022.
    3. Candelaria, Luis E. & Ura, Takuya, 2023. "Identification and inference of network formation games with misclassified links," Journal of Econometrics, Elsevier, vol. 235(2), pages 862-891.
    4. Tadao Hoshino & Daichi Shimamoto & Yasuyuki Todo, 2020. "Accounting for Heterogeneity in Network Formation Behaviour: An Application to Vietnamese SMEs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(5), pages 1042-1067, October.
    5. Bryan S. Graham, 2019. "Network Data," Papers 1912.06346, arXiv.org.
    6. Chih-Sheng Hsieh & Michael D. Konig & Xiaodong Liu, 2022. "A Structural Model for the Coevolution of Networks and Behavior," The Review of Economics and Statistics, MIT Press, vol. 104(2), pages 355-367, May.
    7. Bryan S. Graham, 2019. "Network Data," CeMMAP working papers CWP71/19, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    8. Leung, Michael P., 2019. "A weak law for moments of pairwise stable networks," Journal of Econometrics, Elsevier, vol. 210(2), pages 310-326.
    9. Tadao Hoshino, 2020. "A Pairwise Strategic Network Formation Model with Group Heterogeneity: With an Application to International Travel," Papers 2012.14886, arXiv.org, revised Feb 2021.
    10. Luis E. Candelaria, 2020. "A Semiparametric Network Formation Model with Unobserved Linear Heterogeneity," Papers 2007.05403, arXiv.org, revised Aug 2020.
    11. Gualdani, Cristina, 2021. "An econometric model of network formation with an application to board interlocks between firms," Journal of Econometrics, Elsevier, vol. 224(2), pages 345-370.
    12. Candelaria, Luis E., 2020. "A Semiparametric Network Formation Model with Unobserved Linear Heterogeneity," The Warwick Economics Research Paper Series (TWERPS) 1279, University of Warwick, Department of Economics.
    13. Luis Alvarez & Cristine Pinto & Vladimir Ponczek, 2022. "Homophily in preferences or meetings? Identifying and estimating an iterative network formation model," Papers 2201.06694, arXiv.org, revised Mar 2024.
    14. Andrea Galeotti & Luca Paolo Merlino, 2014. "Endogenous Job Contact Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1201-1226, November.
    15. Lorenzo Cappellari & Konstantinos Tatsiramos, 2010. "Friends’ Networks and Job Finding Rates," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0059, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    16. Caria, Antonia Stefano & Hassen, Ibrahim Worku, 2013. "The formation of job referral networks: Experimental evidence from ubran Ethiopia:," IFPRI discussion papers 1282, International Food Policy Research Institute (IFPRI).
    17. Ma, Shujie & Su, Liangjun & Zhang, Yichong, 2020. "Detecting Latent Communities in Network Formation Models," Economics and Statistics Working Papers 12-2020, Singapore Management University, School of Economics.
    18. Gao, Wayne Yuan & Li, Ming & Xu, Sheng, 2023. "Logical differencing in dyadic network formation models with nontransferable utilities," Journal of Econometrics, Elsevier, vol. 235(1), pages 302-324.
    19. Cappellari, Lorenzo & Tatsiramos, Konstantinos, 2015. "With a little help from my friends? Quality of social networks, job finding and job match quality," European Economic Review, Elsevier, vol. 78(C), pages 55-75.
    20. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 561-624, Elsevier.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2105.12704. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.