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How Strategic Networking Impacts the Networking Outcome: A Complex Adaptive System Approach

Author

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  • Somayeh Koohborfardhaghighi

    (College of Engineering, Seoul National University)

  • Jorn Altmann

    (College of Engineering, Seoul National University)

Abstract

In this study, we provide an interaction model based on complex adaptive system theory, to explain how different methods of network growth and strategic responses of existing network members towards them impact the outcome of networked individuals (i.e., utility gain at the individual level or a society’s collective utility known as social welfare). The proposed interaction model allows us to perform our experiments with dynamic utility computation, while individuals act strategically in response to what other individuals do in the network. We utilized the formulation of the co-author model, as it augments the concept of network structure for modeling individuals’ utilities. The experimental results show that different methods of a network growth lead to different networking outcome for its members. We observed that total networking outcome is the highest (with respect to the co-author model), if newly entered individuals establish their links strategically to other existing members in a way to maximize their own payoffs. We believe that reduction in the total utility due to strategic responses within the network is acceptable in exchange of having a homogenous utility distribution within the population. Our observations give us the idea that, with the help of strategic responses, central network members can be prevented from gaining very high utilities compared to others. Furthermore, network structures can be prevented, in which the utilities of network members are widely dispersed. In such a setting, individuals experience no discrimination in utility gain against other people in their community.

Suggested Citation

  • Somayeh Koohborfardhaghighi & Jorn Altmann, 2016. "How Strategic Networking Impacts the Networking Outcome: A Complex Adaptive System Approach," TEMEP Discussion Papers 2016131, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2016.
  • Handle: RePEc:snv:dp2009:2016131
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    File URL: http://temep-repec.my-groups.de/DP-131.pdf
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    References listed on IDEAS

    as
    1. Somayeh Koohborfardhaghighi & Jorn Altmann, 2014. "How Placing Limitations on the Size of Personal Networks Changes the Structural Properties of Complex Networks," TEMEP Discussion Papers 2014110, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jan 2014.
    2. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    3. Buechel Berno, 2009. "Network Formation with Closeness Incentives," Lecture Notes in Economics and Mathematical Systems, in: Ahmad K. Naimzada & Silvana Stefani & Anna Torriero (ed.), Networks, Topology and Dynamics, pages 95-109, Springer.
    4. Somayeh Koohborfardhaghighi & Jorn Altmann, 2016. "How Network Visibility and Strategic Networking Leads to the Emergence of Certain Network Characteristics: A Complex Adaptive System Approach," TEMEP Discussion Papers 2016130, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2016.
    5. Gallo Edoardo, 2012. "Small World Networks with Segregation Patterns and Brokers," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-46, September.
    6. Somayeh Koohborfardhaghighi & Jorn Altmann, 2014. "How Variability in Individual Patterns of Behavior Changes the Structural Properties of Networks," TEMEP Discussion Papers 2014114, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jun 2014.
    7. M. Koenig & Claudio J. Tessone & Yves Zenou, "undated". "A Dynamic Model of Network Formation with Strategic Interactions," Working Papers CCSS-09-006, ETH Zurich, Chair of Systems Design.
    8. Somayeh Koohborfardhaghighi & Jörn Altmann, 2015. "A Network Formation Model for Social Object Networks," Springer Books, in: Zhenji Zhang & Zuojun Max Shen & Juliang Zhang & Runtong Zhang (ed.), Liss 2014, edition 127, pages 615-625, Springer.
    9. Lynne Hamill & Nigel Gilbert, 2009. "Social Circles: A Simple Structure for Agent-Based Social Network Models," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 12(2), pages 1-3.
    10. D. König Michael & Stefano Battiston, 2009. "From Graph Theory to Models of Economic Networks. A Tutorial," Lecture Notes in Economics and Mathematical Systems, in: Ahmad K. Naimzada & Silvana Stefani & Anna Torriero (ed.), Networks, Topology and Dynamics, pages 23-63, Springer.
    11. Barabási, Albert-László & Albert, Réka & Jeong, Hawoong, 1999. "Mean-field theory for scale-free random networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 272(1), pages 173-187.
    12. Somayeh Koohborfardhaghighi & Jorn Altmann, 2014. "How Structural Changes in Complex Networks Impact Organizational Learning Performance," TEMEP Discussion Papers 2014111, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Mar 2014.
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    Cited by:

    1. Koohborfardhaghighi, Somayeh & Altmann, Jörn & Heshmati, Almas, 2022. "The Interplay between Organizational Structure, Culture and Employees’ Socio-Emotional Skills within Their Social Capital," IZA Discussion Papers 15316, Institute of Labor Economics (IZA).
    2. Somayeh Koohborfardhaghighi & Jorn Altmann, 2016. "How Network Visibility and Strategic Networking Leads to the Emergence of Certain Network Characteristics: A Complex Adaptive System Approach," TEMEP Discussion Papers 2016130, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2016.

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    More about this item

    Keywords

    Co-Author Model; Social Welfare; Strategic Behavior; Utility Maximization; Network Growth Models; Complex Adaptive System Approach; Agent-based Modeling and Simulation.;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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