Latent classes in exchange networks: Sets of positions with common interests*

The research was funded by National Science Foundation grant SES‐9210058.

While it is known that positions in exchange networks are interdependent, little work has been done to develop a systematic procedure to determine the type and pattern of these interdependencies. Wording from an insight by Shubik (1984), this paper proposes a canonical form for such interdependence. The model does not depend on the existence of pre‐existing categories of complementary positions, such as buyers and sellers or men and women. The model uses only network position to create classes of. positions with linked fates. Simulation and experimental results are presented that support this schema. These findings lay the groundwork for the study of collusion in exchange networks: members of latent classes, who share a common fate, would be likely to form coalitions when free communication exists.

Notes

The research was funded by National Science Foundation grant SES‐9210058.

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