Knowledge flows and the geography of networks: A strategic model of small world formation

Nicolas Carayol () and Pascale Roux ()

Journal of Economic Behavior & Organization, 2009, vol. 71, issue 2, pages 414-427

Abstract: This paper aims to demonstrate that the strategic approach to link formation can generate networks that share some of the main structural properties of most real social networks. For this purpose, we introduce a spatialized variation of the Connections model [Jackson, M.O., Wolinsky, A., 1996. A strategic model of social and economic networks. Journal of Economic Theory 71, 44-74] to describe the strategic formation of links by agents who balance the benefits of forming links resulting from imperfect knowledge flows against their costs, which increase with geographic distance. We show, for intermediate levels of knowledge transferability, clustering occurs in geographical space and a few agents sustain distant connections. Such networks exhibit the small world property (high clustering and short average relational distances). When the costs of link formation are normally distributed across agents, asymmetric degree distributions are also obtained.

Keywords: Strategic; network; formation; Time-inhomogeneous; process; Knowledge; flows; Small; worlds; Monte; Carlo; simulations (search for similar items in EconPapers)
Date: 2009

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V8F ... c9d86d6e8bf36afdedbb
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Knowledge flows and the geography of networks. A strategic model of small worlds formation (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:jeborg:v:71:y:2009:i:2:p:414-427

Access Statistics for this article

Journal of Economic Behavior & Organization is edited by J. B. Rosser

More articles in Journal of Economic Behavior & Organization from Elsevier
Series data maintained by Heidi Boesdal ().