Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/233331 
Year of Publication: 
2016
Series/Report no.: 
Discussion paper No. 116
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
We present a model for the dynamics of networks in which edges represent positions in organizations, holders of which are connected to each other when the positions belong to the same organization. Once a vacancy is opened, the new employee can be hired from the current network. In particular, it is possible that the further away a candidate is in the network from the firm having the vacant position, the less likely it is that the candidate is chosen. The search may also involve preferential attachment in the sense that people with high numbers of positions are more likely to be chosen. Microeconomic foundations of the search process are presented. An empirical application to a board interlock network demonstrates that the model is capable of explaining how such networks are formed. It is observed that distances from firms to candidates and the candidates' numbers of positions drive the process.
Subjects: 
search
two-mode network
network formation
board interlock network
JEL: 
D83
D85
Z13
Document Type: 
Working Paper

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