The Rise and Fall of Small Worlds: Exploring the Dynamics of Social Structure

Abstract

LE Tilburg, a.tatarynowicz@uvt.nl T his paper explores the interplay between social structure and economic action by examining some of the evolutionary dynamics of an emergent network that coalesces into a small-world system. The study highlights the small-world system's evolutionary dynamics at both the macro level of the network and the micro level of an individual actor. This dual analytical lens helps establish that, in competitive and information-intensive settings, a small-world system could be a highly dynamic structure that follows an inverted U-shaped evolutionary pattern, wherein an increase in the small-worldliness of the system is followed by its later decline as a result of three factors: (1) the recursive relationship between the evolving social structure and individual actors' formation of bridging ties, which eventually homogenizes the information space and decreases actors' propensity to form bridging ties, creating a globally separated network; (2) self-containment of the smallworld network, or increasing homogenization of the social system, which makes the small world less accepting of and less attractive to new actors, thereby limiting formation of bridging ties to outside clusters; and (3) fragmentation of the smallworld network, or the small-world system's inability to retain current clusters. The study uses data on interorganizational tie formation in the global computer industry in the period from 1996 to 2005 to test the hypothesized relationships.

Toward a Theory of Extended Contact: The Incentives and Opportunities for Bridging Across Network Communities

“…That is, notwithstanding the significant cross-sectoral variations, some industrial settings may display substantial variability with respect to the degree to which they enable or constrain the formation of bridging ties over time. For example, studies of the computer industry suggest that while the strong community structure and the heterogeneous knowledge landscape associated with these communities enabled the formation of bridging ties in the early 1990s, the excessive formation of bridging ties in the following decade squeezed out the very diversity that these ties were designed to harness, thus constraining the formation of new bridges (Gulati et al 2011). The dynamics of global network structure, therefore, can affect not just the opportunities for bridging as this paper established, but also the general, industry-wide incentives for doing so as reflected in the changing diversity of the available knowledge base.…”

“…3 Existing work on the computer industry indicates that the pursuit of bridging ties began to decline around 2000 (Gulati et al 2011). This occurred in response to three sets of developments: (i) the homogenization of the knowledge space and the subsequent decline in returns from bridging collaboration; (ii) the increased uncertainty regarding extended contact following the collapse of the New Economy; and (iii) the emergence of self-contained networks and competing communities of firms.…”

“…This pattern of dependence is the foundation of the value-distribution incentives underlying the formation of bridging ties. The value of unique insights channeled through bridging ties is particularly important in the dynamic and knowledge-intense industries, where firms" survival often rests on continuous innovation (Gulati et al 2011;Rowley et al 2000). In these contexts (the computer industry is a prime example), forming new bridging ties is likely to be especially destabilizing to the dependence status quo.…”

“…17 Because the rate of bridging tie formation varied in the computer industry over 1990-2005(Gulati et al 2011, we accounted for these industry-level dynamics by controlling for the Period fixed effects. In additional analyses, we decomposed the period effects into pre-and post-2000 effects.…”

“…Taken together, these effects demonstrate how both proximate and global network structures can influence actors" behaviors. Finally, we contribute to studies of complex social systems, in which bridging ties often play a critical role by binding actors together into a small world system (e.g., Davis et al 2003;Gulati et al 2011). Exploring the determinants of bridging ties can thus shed light on the evolutionary dynamics of complex networks, as well as on the various forms of integration and divides that characterize many technological, organizational, and political systems (Feld and Carter 1998).…”