Explaining clustering in social networks: towards an evolutionary theory of cascading benefits

Sheen S. Levine and Robert Kurzban
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Sheen S. Levine: Management Department, Lee Kong Chian School of Business, Singapore Management University, Singapore 178899, Singapore, Postal: Management Department, Lee Kong Chian School of Business, Singapore Management University, Singapore 178899, Singapore
Robert Kurzban: Department of Psychology, 3720 Walnut Street, University of Pennsylvania, Philadelphia, PA 19104, USA, Postal: Department of Psychology, 3720 Walnut Street, University of Pennsylvania, Philadelphia, PA 19104, USA

Managerial and Decision Economics, 2006, vol. 27, issue 2-3, 173-187

Abstract: Individual and organizational actors enter into a large number of relationships that include benefiting others without ensuring the equality of reciprocal benefits. We suggest that actors have evolved mechanisms that guide them in the choice of exchange partners, even without conscious calculation or bookkeeping of gain and loss. One such mechanism directs actors to membership in clusters, which are homogenous groups of actors densely connected among themselves and only loosely connected to other groups. We suggest that clusters offer network externalities, which are not possible in sparse networks, thus conferring cascading benefits on the actors contained in those clusters. Using this logic, one can understand the omnipresence of clustering in social networks of individuals and firms. We review the benefits and challenges associated with clustering and use the logic of cascading benefits to derive empirical predictions. Copyright © 2006 John Wiley & Sons, Ltd.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:27:y:2006:i:2-3:p:173-187

DOI: 10.1002/mde.1291

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