Structural holes in social networks with exogenous cliques (Q1656956)

Summary: It has been empirically shown that structural holes in social networks enable potential large benefits to those individuals who bridge them [\textit{R. S. Burt}, ``Structural Holes and Good Ideas'', Am. J. Sociol. 110, No. 2, 349--399 (2004; \url{doi:10.1086/421787})]. The work in [\textit{S. Goyal} and \textit{F. Vega-Redondo}, J. Econ. Theory 137, No. 1, 460--492 (2007; Zbl 1132.91321)] 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 [loc. cit.]. Instead, they can be sustained when the deviation possibilities are restricted and only when they connect small groups of agents to the rest.