Research

Papers on Homophily in Social Networks

“Homophily and Long Run Integration in Social Networks” (2012),

Journal of Economic Theory, forthcoming (with Y. Bramouille, M. Jackson, P. Pin and B. Rogers).

Abstract

We model network formation when heterogeneous nodes enter sequentially and form connections through both random meetings and network-based search, but with type-dependent biases.  We show that there is long-run integration,'' whereby the composition of types in sufficiently old nodes' neighborhoods approaches the global type distribution, provided that the network-based search is unbiased. However, younger nodes' connections still reflect the biased meetings process. We derive the type-based degree distributions and group-level homophily patterns when there are two types and location-based biases. Finally, we illustrate aspects of the model with an empirical application to data on citations in physics journals.

“Identifying Sources of Racial Homophily in High School Friendship Networks” (2010),

Proceedings of the National Academy of Science of the U.S.A. (PNAS) 107, 4857-4861 (with M. Jackson and P. Pin)

Abstract

Homophily, the tendency of people to associate with others similar to themselves, is observed in many social networks, ranging from friendships to marriages to business relationships, and is based on a variety of characteristics, including race, age, gender, religion, and education. We present a technique for distinguishing two primary sources of homophily: biases in the preferences of individuals over the types of their friends and biases in the chances that people meet individuals of other types. We use this technique to analyze racial patterns in friendship networks in a set of American high schools from the Add Health dataset. Biases in preferences and biases in meeting rates are both highly significant in these data, and both types of biases differ significantly across races. Asians and Blacks are biased toward interacting with their own race at rates >7 times higher than Whites, whereas Hispanics exhibit an intermediate bias in meeting opportunities. Asians exhibit the least preference bias, valuing friendships with other types 90% as much as friendships with Asians, whereas Blacks and Hispanics value friendships with other types 55% and 65%as much as same-type friendships, respectively, and Whites fall in between, valuing other-type friendships 75% as much as friendships with Whites. Meetings are significantly more biased in large schools (>1,000 students) than in small schools (<1,000 students), and biases in preferences exhibit some significant variation with the median household income levels in the counties surrounding the schools.

"An Economic Model of Friendship: Homophily, Minorities and Segregation" (2009),

Econometrica 77 (4), 1003-1045, (with Matt Jackson and Paolo Pin).

Abstract

We develop a model of friendship formation that sheds light on segregation patterns observed in social and economic networks. Individuals have types and see typedependent benefits from friendships.We examine the properties of a steady-state equilibrium of a matching process of friendship formation.We use the model to understand three empirical patterns of friendship formation: (i) larger groups tend to form more same-type ties and fewer other-type ties than small groups, (ii) larger groups form more ties per capita, and (iii) all groups are biased towards same-type relative to demographics, with the most extreme bias coming from middle-sized groups. We show how these empirical observations can be generated by biases in preferences and biases in meetings. We also illustrate some welfare implications of the model.

“A Simple Model of Homophily in Social Networks” (Revised May 2012),

(with Fernando Vega Redondo).

Abstract

We study the formation of social ties in a context where agents can be partitioned into different types (e.g. by race, gender, profession, etc.) and their behavior displays some homophily,  i.e. agents tend to connect with others of the same type. Our aim is to provide \textit{simple} microfoundations to this important phenomenon, by endogenizing what is known to be a key mechanism at work, i.e. biases in meeting opportunities. In our model, the size and type-composition of the meeting pools faced by different individuals are shaped by their own decisions. This is shown to induce stark equilibrium behavior of a threshold type: agents inbreed'' (i.e. mostly meet their own type) if, and only if, their group is above certain size. And, as it turns out, it is enough to generate rich pattern of in-group and cross-group ties that is consistent with empirical evidence from at least two two paradigmatic instances: high school friendships and interethnic marriages.

“Homophily, Identity and In-Group Bias: Experimental Evidence” (Revised May 2012),

(with Friederike Mengel) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2088744

Abstract

Many Social Interactions display either or both of the following well documented phenomena. People tend to interact with similar others (homophily). And they tend to treat others more favorably if they are perceived to share the same identity (in-group bias). While both phenomena involve some degree of discrimination towards others, a systematic study of their relations and interplay is yet missing. In this paper we report the findings of an experiment designed to address this issue. Participants are exogenously and randomly assigned to one of two groups. Subsequently they play a sequence of eight games with either an in-group or an out-group member. We find strong evidence of in-group bias when agents are matched exogenously. When agents can affect who they are matched with, we find strong evidence of homophily. However, in-group biases either decrease or disappear altogether under endogenous matching. Self selection of homophilous agents into in-group matches alone cannot explain this fact. We also show that homophily is strongly correlated with risk aversion, and we use this fact to provide an explanation for both the existence of homophily and the disappearance of in-group biases under endogenous matching.

Papers on Coalitions and Public Goods

‘’Kinked’ Norms of Behaviour and Cooperation” (2011)

Economics Letters, 110: 223-225 (with Marco Marini).

“Coalitional Approaches to Collusive Agreements in Oligopoly Games” (2011)

SSRN Working Paper, (with Marco Marini),

"Coalition Formation in Games without Synergies"  (2006),

International Game Theory Review 8(1), 1-16, (with M. Marini)

"Voting over Federations" (2005),

Research in Economics 59 (2005), 1-21.

"Inflation, Welfare and Public Goods" (2002)

Journal of Public Economic Theory 4(3), (with G. Bloise and N. Kikidis )

"Voting on public goods in multi-jurisdictional structures" (2002)

Research in Economics 56, 215-230.

“A Conjectural Cooperative Equilibrium for Strategic Form Games” (2003),

in Game Practice and the Environment, Ed. Edgar Elgar, London, (with M. Marini).

“Stable International Agreements on Transfrontier Pollution under Ratification Constraints” (2003),

in Game Practice and the Environment, Ed. Edgar Elgar, London, (with H. Tulkens).

“A Sequential Approach to the Characteristic Function and the Core in Games with Externalities” (2003), in Advances in Economic Design, Springer Verlag, (with M. Marini).

Papers on Socio-Economic Networks

“Games on Networks: Direct Complements and Indirect Substitutes” (revised December 2012),

(with E. Fumagalli and F. Panebianco)

Abstract

Many types of economic and social activities involve significant behavioral complementarities (peer effects) with neighbors in the social network. The same activities often exert externalities, that cumulates in "stocks" affecting agents' welfare and incentives. For instance, smoking is subject to peer effects, and the stock of passive smoke increases the marginal risks of bad health, decreasing the incentives to smoke. In the linear quadratic framework studied by Ballester et al. (2006), we consider contexts where agents' incentives decrease with the "stock" to which neighbors are exposed (agents may, for instance,  care about their friends' health). In such contexts, the patterns of strategic interaction differ from the network of social relations, as agents display strategic substitution with distance-two neighbors. We show that behavior is predicted by a weighted Bonacich centrality index, with weights accounting for distance-two relations. We find that both maximal behavior and key-players tend to move to the periphery of the network, and we discuss the effect of close-knit communities and segregated groups on aggregate behavior. We finally discuss the implications for peer effects identification and for the emergence of potential biases in the estimation of social effects.

"Bilateral Information Sharing in Oligopoly" (revised February 2011),

(with Francesco Feri).

"Group Stability of Hierarchies in Games with Spillovers" (2007),

Mathematical Social Sciences 54(3), 187-202.