L-2 Regularized maximum likelihood for $β$-model in large and sparse networks

The $\beta$-model is a powerful tool for modeling network generation driven by node degree heterogeneity. Its simple yet expressive nature particularly well-suits large and sparse networks, where many network models become infeasible due to computational challenge and observation scarcity. However, existing estimation algorithms for $\beta$-model do not scale up; and theoretical understandings remain limited to dense networks. This paper brings several major improvements to the method and theory of $\beta$-model to address urgent needs of practical applications. Our contributions include: 1. method: we propose a new $\ell_2$ penalized MLE scheme; we design a novel algorithm that can comfortably handle sparse networks of millions of nodes, much faster and more memory-parsimonious than any existing algorithm; 2. theory: we present new error bounds on beta-models under much weaker assumptions; we also establish new lower-bounds and new asymptotic normality results; distinct from existing literature, our results cover both small and large regularization scenarios and reveal their distinct asymptotic dependency structures; 3. application: we apply our method to large COVID-19 network data sets and discover meaningful results.