🔎 Problem and Purpose

Unobserved heterogeneity—systematic differences across actors that are not measured—poses a persistent threat to studies of social processes. This threat is especially acute for statistical models of networks, where complex dependencies in tie formation combine with restrictive modeling assumptions to magnify bias in inference. The paper introduces a frailty extension to the exponential random graph model (FERGM) to explicitly account for such unobserved heterogeneity.

🧪 How the Model Was Evaluated

• A Monte Carlo analysis assessed performance under controlled conditions.
• Two applications drawn from previously influential work in the networks literature tested the models on substantive empirical cases.

📈 Key Findings

• Failing to account for unobserved heterogeneity can substantially distort inferences about network formation.
• The proposed FERGM generally outperforms the standard ERGM in the Monte Carlo tests and the two empirical applications, often by relatively large margins.
• A novel multilevel estimation strategy for FERGM avoids the degeneration problems that commonly afflict the standard MCMC-MLE approach.

📌 Why This Matters

Accounting for hidden actor-level variation is crucial for reliable conclusions about how networks form. The FERGM and its multilevel estimator offer a practical route to more robust inference in network analysis, reducing bias and avoiding computational degeneration that undermines some conventional ERGM estimates.