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Friendship Networks

Author

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  • Jan K. Brueckner

Abstract

ABSTRACT This 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.

Suggested Citation

  • Jan K. Brueckner, 2006. "Friendship Networks," Journal of Regional Science, Wiley Blackwell, vol. 46(5), pages 847-865, December.
    • Handle: RePEc:bla:jregsc:v:46:y:2006:i:5:p:847-865
    DOI: 10.1111/j.1467-9787.2006.00486.x
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    Cited by:

    1. Gil S. Epstein & Odelia Heizler (Cohen), 2016. "The formation of networks in the diaspora," International Journal of Manpower, Emerald Group Publishing Limited, vol. 37(7), pages 1136-1153, October.
    2. Bayer, Péter & Guerdjikova, Ani, 2024. "Optimism leads to optimality: Ambiguity in network formation," Journal of Economic Dynamics and Control, Elsevier, vol. 168(C).
    3. Aditi Roy & Sudipta Sarangi, 2009. "Revisiting Friendship Networks," Economics Bulletin, AccessEcon, vol. 29(4), pages 2640-2647.
    4. Gil S. Epstein & Odelia Heizler (Cohen), 2016. "Networks in the Diaspora," RFBerlin Discussion Paper Series 1604, ROCKWOOL Foundation Berlin (RFBerlin).
    5. Jan K. Brueckner & Oleg Smirnov, 2007. "Workings Of The Melting Pot: Social Networks And The Evolution Of Population Attributes," Journal of Regional Science, Wiley Blackwell, vol. 47(2), pages 209-228, May.
    6. Jun Oshiro, 2017. "Solitary City: Time, Space and Urban Policy," Manchester School, University of Manchester, vol. 85(6), pages 744-764, December.
    7. Tenev, Anastas P., 2024. "“Friends Are Thieves of Time”: Heuristic attention sharing in stable friendship networks," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 785-809.
    8. Konovalov, Alexander, 2014. "Competition and Cooperation in Network Games," Working Papers in Economics 583, University of Gothenburg, Department of Economics.
    9. Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
    10. Helsley, Robert W. & Zenou, Yves, 2014. "Social networks and interactions in cities," Journal of Economic Theory, Elsevier, vol. 150(C), pages 426-466.
    11. Joost Vandenbossche & Thomas Demuynck, 2013. "Network Formation with Heterogeneous Agents and Absolute Friction," Computational Economics, Springer;Society for Computational Economics, vol. 42(1), pages 23-45, June.

    More about this item

    JEL classification:

    • D0 - Microeconomics - - General
    • D1 - Microeconomics - - Household Behavior

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