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Social Interactions with Endogenous Associations

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Author Info
Bruce A. Weinberg

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Abstract

This paper develops a model of social interactions with endogenous association. People are assumed to invest in relationships to maximize their utility. Even in a linear-in-means model, when associations are endogenous, the effect of macro-group composition on behavior is non-linear and varies across individuals. We also show that larger groups facilitate sorting. Using data on associations among high school students, we provide a range of evidence consistent with our model. Individuals associate with people whose behaviors and characteristics are similar to their own. This tendency is stronger in large groups. We also show that behaviors vary within and between macro-groups in the way predicted by endogenous association.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13038.

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Date of creation: Apr 2007
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Handle: RePEc:nbr:nberwo:13038

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Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination

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Cited by:
(explanations, 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.)

  1. Yannis M. Ioannides & Giorgio Topa, 2009. "Neighborhood Effects: Accomplishments and Looking Beyond Them," Discussion Papers Series, Department of Economics, Tufts University 0736, Department of Economics, Tufts University. [Downloadable!]
  2. Steven N. Durlauf & Yannis M. Ioannides, 2009. "Social Interactions," Discussion Papers Series, Department of Economics, Tufts University 0739, Department of Economics, Tufts University. [Downloadable!]
  3. Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2007. "Identification of Peer Effects through Social Networks," IZA Discussion Papers 2652, Institute for the Study of Labor (IZA). [Downloadable!]
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