AbstractThis paper develops a model of social networks different from those presented in the recent literature. In contrast to existing models, the level of investment in link formation is a continuous decision variable, and links form stochastically rather than deterministically, with the probability depending on the noncooperative investment choices of both parties. Since the network structure is then stochastic rather than deterministic, the actual pattern of links cannot be specified, as in previous models, with the analysis focusing instead on which links are most likely to form. This alternate approach leads to a much simpler mathematical structure than in previous work. The analysis, which is couched in the context of friendship networks, shows that individual investment in friendship formation is too low. In addition, the analysis shows that, in an asymmetric setting where one individual has personal magnetism or a broad group of acquaintances, friendship links involving this attractive agent are most likely to form. Copyright Blackwell Publishing, Inc. 2006
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Regional Science.
Volume (Year): 46 (2006)
Issue (Month): 5 ()
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-4146
Other versions of this item:
- Jan K. Brueckner, 2004. "Friendship Networks," Econometric Society 2004 North American Winter Meetings 184, Econometric Society.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matthew O. Jackson & Asher Wolinsky, 1995.
"A Strategic Model of Social and Economic Networks,"
1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Yannis M. Ioannides & Linda Datcher Loury, 2002.
"Job Information Networks, Neighborhood Effects and Inequality,"
Discussion Papers Series, Department of Economics, Tufts University
0217, Department of Economics, Tufts University.
- Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
- Calvo-Armengol, Antoni & Zenou, Yves, 2005.
"Job matching, social network and word-of-mouth communication,"
Journal of Urban Economics,
Elsevier, vol. 57(3), pages 500-522, May.
- Calvó-Armengol, Antoni & Zenou, Yves, 2003. "Job Matching, Social Network and Word-of-Mouth Communication," IZA Discussion Papers 771, Institute for the Study of Labor (IZA).
- Calvó-Armengol, Antoni & Zenou, Yves, 2001. "Job Matching, Social Network and Word-of-Mouth Communication," CEPR Discussion Papers 2797, C.E.P.R. Discussion Papers.
- Calvó-Armengol, Antoni & Zenou, Yves, 2001. "Job Matching, Social Network and Word-of-Mouth Communication," Seminar Papers 695, Stockholm University, Institute for International Economic Studies.
- Matthew O. Jackson & Alison Watts, 2000.
"On the Formation of Interaction Networks in Social Coordination Games,"
Econometric Society World Congress 2000 Contributed Papers
0778, Econometric Society.
- Jackson, Matthew O. & Watts, Alison, 2002. "On the formation of interaction networks in social coordination games," Games and Economic Behavior, Elsevier, vol. 41(2), pages 265-291, November.
- Jackson, Matthew O. & Watts, Alison, 2002.
"The Evolution of Social and Economic Networks,"
Journal of Economic Theory,
Elsevier, vol. 106(2), pages 265-295, October.
- Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
- Francis Bloch & Bhaskar Dutta, 2008.
"Communication networks with endogeneous link strength,"
Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers
08-15, Indian Statistical Institute, New Delhi, India.
- Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
- Bloch, Francis & Dutta, Bhaskar, 2005. "Communication Networks with Endogenous Link Strength," The Warwick Economics Research Paper Series (TWERPS) 723, University of Warwick, Department of Economics.
- Sudipta Sarangi & Aditi Roy, .
"Revisiting Friendship Networks,"
Departmental Working Papers
2009-12, Department of Economics, Louisiana State University.
- Gilles, R.P. & Sarangi, S., 2004. "Social Network Formation with Consent," Discussion Paper 2004-70, Tilburg University, Center for Economic Research.
- Gilles, R.P. & Chakrabarti, S. & Sarangi, S. & Badasyan, N., 2004. "The Role of Middlemen inEfficient and Strongly Pairwise Stable Networks," Discussion Paper 2004-64, Tilburg University, Center for Economic Research.
- Joost Vandenbossche & Thomas Demuynck, 2013.
"Network Formation with Heterogeneous Agents and Absolute Friction,"
Society for Computational Economics, vol. 42(1), pages 23-45, June.
- J. Vandenbossche & T. Demuynck, 2010. "Network formation with heterogeneous agents and absolute friction," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 10/642, Ghent University, Faculty of Economics and Business Administration.
- Konovalov, Alexander, 2014. "Competition and Cooperation in Network Games," Working Papers in Economics 583, University of Gothenburg, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.