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. 2011 Mar 29;108(13):5199-202.
doi: 10.1073/pnas.1015564108. Epub 2011 Mar 14.

Network structure of production

Enghin Atalay  1 , Ali Hortaçsu, James Roberts, Chad Syverson
Affiliations

Network structure of production

Enghin Atalay et al. Proc Natl Acad Sci U S A. .

Abstract

Complex social networks have received increasing attention from researchers. Recent work has focused on mechanisms that produce scale-free networks. We theoretically and empirically characterize the buyer-supplier network of the US economy and find that purely scale-free models have trouble matching key attributes of the network. We construct an alternative model that incorporates realistic features of firms' buyer-supplier relationships and estimate the model's parameters using microdata on firms' self-reported customers. This alternative framework is better able to match the attributes of the actual economic network and aids in further understanding several important economic phenomena.

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Conflict of interest statement

The authors declare no conflict of interest.

Figures

Fig. 1.
Fig. 1.
Model fit. (A) Preferential attachment model, with data for 2005 (squares) and 2006 (triangles). (B) Model of section two (dashed line) and preferential attachment model (solid line), with data for 2005 (squares) and 2006 (triangles).
Fig. 2.
Fig. 2.
Buyer–supplier network in 2006. GM, Ford, and Chrysler are colored red. Their suppliers are colored orange. All other firms are gray.
See this image and copyright information in PMC

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