Researchers have long observed that the small-world" property, which combines the concepts of high transitivity or clustering with a low average path length, is ubiquitous for networks obtained from a variety of disciplines, including social sciences, biology, neuroscience, and ecology. However, we find several shortcomings of the currently prevalent definition and detection methods rendering the concept less powerful. First, the widely used \textit{small world coefficient} metric combines high transitivity with a low average path length in a single measure that confounds the two separate aspects. We find that the value of the metric is dominated by transitivity, and in several cases, networks get flagged as small world" solely because of
their high transitivity. Second, the detection methods lack a formal
statistical inference. Third, the comparison is typically performed against
simplistic random graph models as the baseline, ignoring well-known network
characteristics and risks confounding the small world property with other
network properties. We decouple the properties of high transitivity and low
average path length as separate events to test for. Then we define the property
as a statistical test between a suitable null hypothesis and a superimposed
alternative hypothesis. We propose a parametric bootstrap test with several
null hypothesis models to allow a wide range of background structures in the
network. In addition to the bootstrap tests, we also propose an asymptotic test
under the Erd"{o}s-Ren'{y}i null model for which we provide theoretical
guarantees on the asymptotic level and power. Our theoretical results include
asymptotic distributions of clustering coefficient for various asymptotic
growth rates on the probability of an edge. Applying the proposed methods to a
large number of network datasets, we uncover new insights about their
small-world property.

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