  The small-world phenomenon has been already the subject of a huge variety of
papers, showing its appeareance in a variety of systems. However, some big
holes still remain to be filled, as the commonly adopted mathematical
formulation suffers from a variety of limitations, that make it unsuitable to
provide a general tool of analysis for real networks, and not just for
mathematical (topological) abstractions. In this paper we show where the major
problems arise, and how there is therefore the need for a new reformulation of
the small-world concept. Together with an analysis of the variables involved,
we then propose a new theory of small-world networks based on two leading
concepts: efficiency and cost. Efficiency measures how well information
propagates over the network, and cost measures how expensive it is to build a
network. The combination of these factors leads us to introduce the concept of
{\em economic small worlds}, that formalizes the idea of networks that are
"cheap" to build, and nevertheless efficient in propagating information, both
at global and local scale. This new concept is shown to overcome all the
limitations proper of the so-far commonly adopted formulation, and to provide
an adequate tool to quantitatively analyze the behaviour of complex networks in
the real world. Various complex systems are analyzed, ranging from the realm of
neural networks, to social sciences, to communication and transportation
networks. In each case, economic small worlds are found. Moreover, using the
economic small-world framework, the construction principles of these networks
can be quantitatively analyzed and compared, giving good insights on how
efficiency and economy principles combine up to shape all these systems.
