Cooperation and cascading benefits

By Ed Vielmetti, published at 10 May 2007 - 8:12pm, last updated 11 years 13 weeks ago.

Levine, S. S. & Kurzban, R. 2006. Explaining Clustering in Social

Networks: Towards an Evolutionary Theory of Cascading Benefits.

Managerial and Decision Economics, 27(2-3): 173-187.

A copy is available from the authors upon request - sslevine@sslevine.com

Abstract:

Individual and organizational actors enter into a large number of relationships that include benefiting others without ensuring the equality of reciprocal benefits. We suggest that actors have evolved mechanisms that guide them in the choice of exchange partners, even without conscious calculation or bookkeeping of gain and loss. One such mechanism directs actors to membership in clusters, which are homogenous groups of actors densely connected among themselves and only loosely connected to other groups. We suggest that clusters offer network

externalities, which are not possible in sparse networks, thus conferring cascading benefits on the actors contained in those clusters. Using this logic, one can understand the omnipresence of clustering in social networks of individuals and firms. We review the benefits and challenges associated with clustering and use the logic of cascading benefits to derive empirical

predictions.