Making Strategic Connections: Stimulative Policies for a Dynamic Network

We perform simulations on a network of venture capitalists in Silicon Valley. We test several rules implied by the literature to identify ways to make strategic connections that enhance a policy-maker’s goals. Some rules target fairness and others target connectivity; but one strategy may be especially attractive. A ‘smart small world’ rule attends to agent diversity as a way to facilitate both output and social fairness by using a cellular automata approach to predict network evolution. The information in social networks might contribute to overall output yet flatten the informal hierarchy to bring peripheral members closer to the network center.