Socioeconomic networks with long-range interactions

We study a modified version of a model previously proposed by Jackson and Wolinsky to account for communication of information and allocation of goods in socioeconomic networks. In the model, the utility function of each node is given by a weighted sum of contributions from all accessible nodes. The weights, parametrized by the variable δ, decrease with distance. We introduce a growth mechanism where new nodes attach to the existing network preferentially by utility. By increasing δ, the network structure evolves from a power-law to an exponential degree distribution, passing through a regime characterized by shorter average path length, lower degree assortativity, and higher central point dominance. In the second part of the paper we compare different network structures in terms of the average utility received by each node. We show that power-law networks provide higher average utility than Poisson random networks. This provides a possible justification for the ubiquitousness of scale-free networks in the real world. © 2008 The American Physical Society.