Search in the Formation of Large Networks: How Random are Socially Generated Networks?
Matthew Jackson and
Game Theory and Information from University Library of Munich, Germany
We present a model of network formation where entering nodes find other nodes to link to both completely at random and through search of the neighborhoods of these randomly met nodes. We show that this model exhibits the full spectrum of features that have been found to characterize large socially generated networks. Moreover, we derive the distribution of degree (number of links) across nodes, and show that while the upper tail of the distribution is approximately ``scale- free,'' the lower tail may exhibit substantial curvature, just as in observed networks. We then fit the model to data from six networks. Besides offering a close fit of these diverse networks, the model allows us to impute the relative importance of search versus random attachment in link formation. We find that the fitted ratio of random meetings to search-based meetings varies dramatically across these applications. Finally, we show that as this random/search ratio varies, the resulting degree distributions can be completely ordered in the sense of second order stochastic dominance. This allows us to infer how the relative randomness in the formation process affects average utility in the network.
Keywords: Networks; Network Formation; Power Laws; Scale-Free Networks; Small Worlds; Search (search for similar items in EconPapers)
JEL-codes: A14 C71 C72 (search for similar items in EconPapers)
Pages: 44 pages
New Economics Papers: this item is included in nep-gth and nep-net
Note: Type of Document - pdf; pages: 44
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Working Paper: Search in the formation of large networks: How random are socially generated networks? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:0503005
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