Effect of Homophily on Network Formation

Kibae Kim () and Jörn Altmann
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Kibae Kim: Technology Management, Economics, and Policy Program; College of Engineering; Seoul National University

No 2015121, TEMEP Discussion Papers from Seoul National University; Technology Management, Economics, and Policy Program (TEMEP)

Abstract: Although there is much research on network formation based on the preferential attach- ment rule, the research did not come up with a formula that, on the one hand, can re- produce shapes of cumulative degree distributions of empirical complex networks and, on the other hand, can represent intuitively theories on individual behavior. In this paper, we propose a formula that closes this gap by integrating into the formula for the preferential attachment rule (i.e., a node with higher degree is more likely to gain a new link) a repre- sentation of the theory of individual behavior with respect to nodes preferring to connect to other nodes with similar attributes (i.e., homophily). Based on this formula, we simulate the shapes of cumulative degree distributions for different levels of homophily and five different seed networks. Our simulation results suggest that homophily and the preferential attachment rule interact for all five types of seed networks. Surprisingly, the resulting cumulative degree distribution in log-log scale always shifts from a concave shape to a convex shape, as the level of homophily gets larger. Therefore, our formula can explain intuitively why some of the empirical complex networks show a linear cumulative degree distribution in log-log scale while others show either a concave or convex shape. Furthermore, another major finding indicates that homophily makes people of a group richer than people outside this group, which is a surprising and significant finding.

Keywords: Complex Social Network Evolution; Cumulative Degree Distribution; Preferential Attachment Rule and Homophily; Empirical Data and Simulation. (search for similar items in EconPapers)
JEL-codes: A12 C63 C73 D85 Z13 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2015-01, Revised 2017-03
New Economics Papers: this item is included in nep-gth, nep-net and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Elsevier Journal on Communications in Nonlinear Science and Numerical Simulation.

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Persistent link: https://EconPapers.repec.org/RePEc:snv:dp2009:2015121

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