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

Somayeh Koohborfardhaghighi () and Jörn Altmann
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Somayeh Koohborfardhaghighi: College of Engineering, Seoul National University

No 2016131, TEMEP Discussion Papers from Seoul National University; Technology Management, Economics, and Policy Program (TEMEP)

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.

Keywords: Co-Author Model; Social Welfare; Strategic Behavior; Utility Maximization; Network Growth Models; Complex Adaptive System Approach; Agent-based Modeling and Simulation. (search for similar items in EconPapers)
JEL-codes: A13 C02 C15 C63 C73 D85 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2016-08, Revised 2016-08
New Economics Papers: this item is included in nep-cdm and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Proceedings of the 18th International Conference on Electronic Commerce, ICEC2016.

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Persistent link: https://EconPapers.repec.org/RePEc:snv:dp2009:2016131

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