Social Networks and the Process of “Globalization”

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Show simple item record DUERNECKER, Georg VEGA-REDONDO, Fernando 2012-11-14T15:46:04Z 2012-11-14T15:46:04Z 2012
dc.identifier.issn 1725-6704
dc.description.abstract We propose a stylised dynamic model to understand the role of social networks in the phenomenon we call “globalization.” This term refers to the process by which even agents who are geographically far apart come to interact, thus being able to overcome what would otherwise be a fast saturation of local opportunities. A key feature of our model is that the social network is the main channel through which agents exploit new opportunities. Therefore, only if the social network becomes global (heuristically, it “reaches far in few steps”) can global interaction be steadily sustained. To shed light on the conditions under which such a transformation may, or may not, take place is the main objective of the paper. One of the main insights arising from the model is that, in order for the social network to turn global, the economy needs to display a degree of “geographical cohesion” that is neither too high (for then global opportunities simply do not arise) nor too low (then the meeting mechanism displays too little structure for the process to take off). But if globalization does materialize, we show that it is a robust state of affairs that often arises abruptly as key parameters change. This occurs, in particular, as the rate of arrival of ideas rises, or when there is a high enough increase in the range at which the network transmits information. en
dc.format.mimetype application/pdf
dc.language.iso en en
dc.relation.ispartofseries EUI ECO en
dc.relation.ispartofseries 2012/25 en
dc.rights info:eu-repo/semantics/openAccess
dc.subject Social networks en
dc.subject Globalization en
dc.subject Search en
dc.subject Cooperation en
dc.subject Social Cohesion en
dc.subject Innovation en
dc.subject D83 en
dc.subject D85 en
dc.subject C73 en
dc.subject O17 en
dc.subject O43 en
dc.title Social Networks and the Process of “Globalization” en
dc.type Working Paper en
dc.neeo.contributor DUERNECKER|Georg|aut|
dc.neeo.contributor VEGA-REDONDO|Fernando|aut|EUI70011
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