Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1116: The Economic Consequences of Social Network Structure

Matthew O. Jackson (), Brian Rogers () and Yves Zenou ()
Additional contact information
Matthew O. Jackson: Stanford University, Postal: Department of Economics
Brian Rogers: Washington University, Postal: Department of Economics
Yves Zenou: Monash University,, Department of Economics,, Postal: Stockholm University and the Research Institute of Industrial Economics (IFN), P.O. Bo 55665, SE-102 15 Stockholm, Sweden

Abstract: We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of `macro' and `micro' characteristics of social interaction networks and discuss both the theoretical and empirical findings concerning the role of those characteristics in determining learning, diffusion, decisions, and resulting behaviors. We also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors.

Keywords: Social networks; Social economics; Homophily; Diffusion; Social learning contagion; Centrality measures; Endogeneity; Network formation

JEL-codes: C72; D85; L14; Z13

65 pages, March 7, 2016

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