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A Positive Theory of Network Connectivity

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Document pages: 37 pages

Abstract: This paper develops a positive theory of network connectivity, seeking to explain the micro-foundations of alternative network topologies as the result of self-interested actors. By building roads, landowners hope to increase their parcels’ accessibility and economic value. A simulation model is performed on a grid-like land use layer with a downtown in the center, whose structure resembles the early form of many Midwestern andWestern (US) cities. The topological attributes for the networks are evaluated. This research posits that road networks experience an evolutionary process where a tree-like structure first emerges around the centered parcel before the network pushes outward to the periphery. In addition, road network topology undergoes clear phase changes as the economic values of parcels vary. The results demonstrate that even without a centralized authority, road networks have the property of self-organization and evolution, and, that in the absence of intervention, the tree-like or web-like nature of networks is a result of the underlying economics.

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