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Structural holes and densely connected communities

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Abstract
It has been empirically shown that structural holes in social networks enable potential large benefits to those individuals who bridge them (Burt, 2004). The pioneering paper Goyal and Vega-Redondo (2007) offers a new incentives based explanation of this phenomenon. But the main equilibrium network of their model does not display a basic empirical regularity: the architecture of social networks is characterized by the existence of densely linked communities loosely connected to one another (Granovetter, 1983). This paper analyzes the conditions under which agents who benefit from bridging structural holes can be sustained in equilibrium networks constituted by densely linked groups.

Suggested Citation

  • Antoni Rubí-Barceló, 2008. "Structural holes and densely connected communities," DEA Working Papers 32, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    • Handle: RePEc:ubi:deawps:32
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    References listed on IDEAS

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    1. Charness, Gary & Corominas-Bosch, Margarida & Frechette, Guillaume R., 2007. "Bargaining and network structure: An experiment," Journal of Economic Theory, Elsevier, vol. 136(1), pages 28-65, September.
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      • Dutta, Bhaskar & Mutuswami, Suresh, 1996. "Stable Networks," Working Papers 971, California Institute of Technology, Division of the Humanities and Social Sciences.
    6. Sanjeev Goyal & Sumit Joshi, 2006. "Bilateralism And Free Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 749-778, August.
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    More about this item

    Keywords

    network formation; personal income distribution; structural holes; communities;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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