The Strength of Direct Ties: Evidence from the Electronic Game Industry

Claussen, Jörg; Falck, Oliver; Grohsjean, Thorsten

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The Strength of Direct Ties: Evidence from the Electronic Game Industry

International Journal of Industrial Organization, 30 (2), 2012, 223-230

25 Pages Posted: 19 Aug 2010 Last revised: 17 Apr 2012

See all articles by Jörg Claussen

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics

Oliver Falck

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation

Thorsten Grohsjean

Bocconi University - Department of Management and Technology

Date Written: July 27, 2011

Abstract

We analyze the economic effects of a developer’s connectedness in the electronic game industry. Knowledge spillovers between developers are likely to be of special relevance in this knowledge-intensive and regionally concentrated industry. We calculate social network measures for a developer’s connectedness to other developers at multiple points in time. In a regression in which we exploit within-career variation in social network measures, we find that the number of direct ties a developer has to other developers has a strong effect on both a game’s revenues and critics’ scores. The quality of indirect ties makes no additional contribution to the game’s success.

Keywords: Social Network Analysis, Game Industry, Knowledge Spillovers

JEL Classification: L14, L86, D83

Suggested Citation: Suggested Citation

Claussen, Jörg and Falck, Oliver and Grohsjean, Thorsten, The Strength of Direct Ties: Evidence from the Electronic Game Industry (July 27, 2011). International Journal of Industrial Organization, 30 (2), 2012, 223-230, Available at SSRN: https://ssrn.com/abstract=1661022