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Games 2017, 8(3), 32; https://doi.org/10.3390/g8030032

Structural Holes in Social Networks with Exogenous Cliques

Departament d’Economia Aplicada, Universitat de les Illes Balears, Campus UIB, 07122 Palma de Mallorca, Spain
Received: 12 June 2017 / Revised: 19 July 2017 / Accepted: 25 July 2017 / Published: 1 August 2017
(This article belongs to the Special Issue Combinatorial Optimization and Games)
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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 work in Goyal and Vega-Redondo (2007) shows that the large payoff differentials caused by structural holes can persist even when agents strategically add and remove ties to smooth those differentials, thereby providing a game-theoretic rationale for the existence of bridge-agents. The present paper ties back to the initial empirical literature by explicitly assuming that agents are exogenously linked forming cliques, as in a firm environment. In this setting, bridge-agents cannot be sustained under the same conditions of Goyal and Vega-Redondo (2007). Instead, they can be sustained when the deviation possibilities are restricted and only when they connect small groups of agents to the rest. View Full-Text
Keywords: network formation; structural holes; intermediation; firm organization network formation; structural holes; intermediation; firm organization
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Rubí-Barceló, A. Structural Holes in Social Networks with Exogenous Cliques. Games 2017, 8, 32.

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