10.7910/DVN/K3D1M2 Morgan, Jason Jason Morgan The Ohio State University Box-Steffensmeier, Janet M. Janet M. Box-Steffensmeier The Ohio State University Christenson, Dino P. Dino P. Christenson Boston University Harvard Dataverse 2017 Social Sciences Political Analysis Morgan, Jason Jason Morgan The Ohio State University 2017-02-28 2017-04-21 10.7910/DVN/K3D1M2/FUPJTW 115500636 application/zip 1.0 Creative Commons CC0 1.0 Universal Public Domain Dedication. In the study of social processes, the presence of unobserved heterogeneity is a regular concern. It should be particularly worrisome for the statistical analysis of networks, given the complex dependencies that shape network formation combined with the re- strictive assumptions of related models. In this paper, we demonstrate the importance of explicitly accounting for unobserved heterogeneity in exponential random graph models (ERGM) with a Monte Carlo analysis and two applications that have played an important role in the networks literature. Overall, these analyses show that failing to account for unobserved heterogeneity can have a significant impact on inferences about network formation. The proposed frailty extension to the ERGM (FERGM) generally outperforms the ERGM in these cases, and does so by relatively large mar- gins. Moreover, our novel multilevel estimation strategy has the advantage of avoiding the problem of degeneration that plagues the standard MCMC-MLE approach. Volume #, Issue #