mathematics of networks

Abstract

In much of economic theory it is assumed that economic agents interact, directly or indirectly, with all others, or at least that they have the opportunity to do so in order to achieve a desired outcome for themselves. In reality, as common sense tells us, things are quite different. Traders in a market have preferred trading partners, perhaps because of an established history of trust, or simply for convenience. Buyers and sellers have preferred suppliers and customers. Consumers have preferred brands and outlets. And most individuals limit their interactions, economic or otherwise, to a select circle of partners or acquaintances. In many cases partners are chosen not on economic grounds but for social reasons: individuals tend overwhelmingly to deal with others who revolve in the same circles as they do, socially, intellectually or culturally.