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Search in Networks: The Case of Board Interlocks

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  • Mitri Kitti

    (University of Turku)

  • Matti Pihlava

    (University of Turku)

  • Hannu Salonen

    (University of Turku)

Abstract

We present a model for the dynamics of networks in which edges represent positions in organizations, holders of which are connected to each other when the positions belong to the same organization. Once a vacancy is opened, the new employee can be hired from the current network. In particular, it is possible that the further away a candidate is in the network from the firm having the vacant position, the less likely it is that the candidate is chosen. The search may also involve preferential attachment in the sense that people with high numbers of positions are more likely to be chosen. Microeconomic foundations of the search process are presented. An empirical application to a board interlock network demonstrates that the model is capable of explaining how such networks are formed. It is observed that distances from firms to candidates and the candidates' numbers of positions drive the process.

Suggested Citation

  • Mitri Kitti & Matti Pihlava & Hannu Salonen, 2016. "Search in Networks: The Case of Board Interlocks," Discussion Papers 116, Aboa Centre for Economics.
  • Handle: RePEc:tkk:dpaper:dp116
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    More about this item

    Keywords

    search; two-mode network; network formation; board interlock network;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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