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Social Status in Networks

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Listed:
  • Nicole Immorlica
  • Rachel Kranton
  • Mihai Manea
  • Greg Stoddard

Abstract

We study social comparisons and status seeking in an interconnected society. Individuals take costly actions that have direct benefits and also confer social status. A new measure of interconnectedness--cohesion--captures the intensity of incentives for seeking status. Equilibria stratify players into social classes, with each class's action pinned down by cohesion. A network decomposition algorithm characterizes the highest (and most inefficient) equilibrium. Members of the largest maximally cohesive set form the highest class. Alternatively, players not belonging to sets more cohesive than the set of all nodes constitute the lowest class. Intermediate classes are identified by iterating a cohesion operator. We also characterize networks that accommodate multiple-class equilibria.

Suggested Citation

  • Nicole Immorlica & Rachel Kranton & Mihai Manea & Greg Stoddard, 2017. "Social Status in Networks," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 1-30, February.
    • Handle: RePEc:aea:aejmic:v:9:y:2017:i:1:p:1-30
    Note: DOI: 10.1257/mic.20160082
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    References listed on IDEAS

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    Cited by:

    1. Goldbaum, David, 2021. "The origins of influence," Economic Modelling, Elsevier, vol. 97(C), pages 380-396.
    2. Alastair Langtry, 2022. "Keeping up with "The Joneses": reference dependent choice with social comparisons," Papers 2203.10305, arXiv.org, revised Aug 2022.
    3. Ghiglino,C. & Langtry, A., 2023. "Status Substitution and Conspicuous Consumption," Cambridge Working Papers in Economics 2324, Faculty of Economics, University of Cambridge.
    4. Lorenz Goette & Egon Tripodi, 2021. "Social Influence in Prosocial Behavior: Evidence from a Large-Scale Experiment [“Social Distance and Social Decisions]," Journal of the European Economic Association, European Economic Association, vol. 19(4), pages 2373-2398.
    5. Evan Sadler & Benjamin Golub, 2021. "Games on Endogenous Networks," Papers 2102.01587, arXiv.org, revised Feb 2024.
    6. Haagsma, Rein, 2018. "Income inequality and saving in a class society: The role of ordinal status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-31.
    7. Lorenz Götte & Egon Tripodi, 2022. "Social Recognition: Experimental Evidence from Blood Donors," CESifo Working Paper Series 9719, CESifo.
    8. López-Pintado, Dunia & Meléndez-Jiménez, Miguel A., 2021. "Far above others," Journal of Economic Theory, Elsevier, vol. 198(C).
      • Dunia López-Pintado & Miguel A. Meléndez-Jiménez, 2018. "Far above others," Working Papers 18.12, Universidad Pablo de Olavide, Department of Economics.
    9. Nikolai S. Kukushkin & Pierre von Mouche, 2018. "Cournot tatonnement and Nash equilibrium in binary status games," Economics Bulletin, AccessEcon, vol. 38(2), pages 1038-1044.
    10. Antinyan, Armenak & Horváth, Gergely & Jia, Mofei, 2019. "Social status competition and the impact of income inequality in evolving social networks: An agent-based model," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 79(C), pages 53-69.
    11. Antinyan, Armenak & Horváth, Gergely & Jia, Mofei, 2020. "Curbing the consumption of positional goods: Behavioral interventions versus taxation," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 1-21.
    12. Bramoullé, Y. & Ghiglino, C., 2024. "Status Consumption in Networks: A Reference Dependent Approach," Cambridge Working Papers in Economics 2414, Faculty of Economics, University of Cambridge.
    13. Bramoullé, Y. & Ghiglino, C., 2024. "Status Consumption in Networks: A Reference Dependent Approach," Janeway Institute Working Papers 2409, Faculty of Economics, University of Cambridge.
    14. Kukushkin, Nikolai S., 2022. "Ordinal status games on networks," Journal of Mathematical Economics, Elsevier, vol. 100(C).
    15. Zhang, Yang & He, Longfei, 2021. "Theory and experiments on network games of public goods: inequality aversion and welfare preference," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 326-347.
    16. Yann Bramoullé & Christian Ghiglino, 2022. "Loss Aversion and Conspicuous Consumption in Networks," Working Papers hal-03630455, HAL.
    17. Haagsma, Rein, 2018. "Income inequality and saving in a class society: The role of ordinal status," Economics Discussion Papers 2018-12, Kiel Institute for the World Economy (IfW Kiel).
    18. Pascal Courty & Merwan Engineer, 2019. "A pure hedonic theory of utility and status: Unhappy but efficient invidious comparisons," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(4), pages 601-621, August.
    19. Chang, Juin-jen & Liu, Chia-ying & Wang, Wei-neng, 2018. "Conspicuous consumption and trade unionism," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 350-366.
    20. Zeng Lian & Jaimie W. Lien & Lin Lu & Jie Zheng, 2021. "International trade with social comparisons," Review of International Economics, Wiley Blackwell, vol. 29(3), pages 533-556, August.
    21. Stark, Oded & Bielawski, Jakub & Falniowski, Fryderyk, 2023. "Measuring Income Inequality in Social Networks," IZA Discussion Papers 16666, Institute of Labor Economics (IZA).
    22. Petach, Luke A. & Tavani, Daniele, 2021. "Consumption externalities and growth: Theory and evidence for the United States," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 976-997.
    23. Alastair Langtry & Christian Ghinglino, 2023. "Status substitution and conspicuous consumption," Papers 2303.07008, arXiv.org, revised Feb 2024.
    24. Zhenhua Feng & Jaimie W. Lien & Jie Zheng, 2018. "Keeping up with the Neighbors: Social Interaction in a Production Economy," Mathematics, MDPI, vol. 6(9), pages 1-14, September.

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    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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