Spread of decisions in the corporate board network

Stefano Battiston (1) , Gérard Weisbuch (1) , Eric Bonabeau (2)

1 LPS - Laboratoire de Physique Statistique de l'ENS
2 Icosystem Corporation - Icosystem Corporation

Boards of large corporations sharing some of their directorsare connected in complex networks. Boards are responsible forcorporations' long-term strategy and are often involved in decisionsabout a common topic related to the belief in economical growth orrecession.We are interested in understanding under which conditions a largemajority of boards making a same decision can emerge in the network. Wepresent a model where board directors are engaged in a decision makingdynamics based on "herd behavior". Boards influence each other throughshared directors.We find that imitation of colleagues and opinion bias due to theinterlock do not trigger an avalanche of identical decisions over theboard network, whereas the information about interlocked boards'decisions does. There is no need to invoke global public information, norexternal driving forces.This model provides a simple endogenous mechanism to explain thefact that boards of the largest corporations of a country can, inthe span of a few months, take the same decisions about generaltopics.

Mots clés: social networks; opinion dynamics; directorate; interlock; Ising model; Ising model.

Domaines: Autre [cond-mat.other]

Stefano Battiston, Gérard Weisbuch, Eric Bonabeau. Spread of decisions in the corporate board network. 2003. ⟨hal-00000933⟩