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The cost of segregation in (social) networks

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  • Allouch, Nizar

Abstract

This paper investigates the welfare effect of income redistribution in the private provision of public goods on networks. We first show that the welfare effect of income redistribution is determined by Bonacich centrality. Then we develop an index based on the network structure of interactions, which, roughly speaking, measures the welfare effect of income redistribution confined to a component of contributors. The proposed index vanishes when applied to large components of contributors that display special segregated interactions, which suggests an “asymptotic neutrality” of redistributive policies.

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  • Allouch, Nizar, 2017. "The cost of segregation in (social) networks," Games and Economic Behavior, Elsevier, vol. 106(C), pages 329-342.
    • Handle: RePEc:eee:gamebe:v:106:y:2017:i:c:p:329-342
    DOI: 10.1016/j.geb.2017.08.012
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    Cited by:

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    2. Toomas Hinnosaar, 2019. "Price Setting on a Network," Papers 1904.06757, arXiv.org.
    3. Nizar Allouch & Jayeeta Bhattacharya, 2021. "The Key Class in Networks," Studies in Economics 2110, School of Economics, University of Kent.
    4. Christophe Bravard & Sudipta Sarangi & ANNE NOUWELAND & MARCO SLIKKER, 2016. "The Position Value for Partition Function Form Network Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(2), pages 226-247, April.
    5. Allouch, Nizar & King, Maia, 2021. "Welfare targeting in networks," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    6. Meléndez-Jiménez, Miguel A. & Polanski, Arnold, 2020. "Dirty neighbors — Pollution in an interlinked world," Energy Economics, Elsevier, vol. 86(C).
    7. Ying Chen & Tom Lane & Stuart McDonald, 2023. "Endogenous Network Formation in Local Public Goods: An Experimental Analysis," Discussion Papers 2023-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    8. Matthew Elliott & Benjamin Golub, 2019. "A Network Approach to Public Goods," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 730-776.
    9. Walsh, A. M., 2019. "Games on Multi-Layer Networks," Cambridge Working Papers in Economics 1954, Faculty of Economics, University of Cambridge.
    10. King, Maia & Tarbush, Bassel & Teytelboym, Alexander, 2019. "Targeted carbon tax reforms," European Economic Review, Elsevier, vol. 119(C), pages 526-547.
    11. Nizar Allouch & Maia King, 2019. "Constrained public goods in networks," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(5), pages 895-902, October.
    12. Kinateder, Markus & Merlino, Luca Paolo, 2022. "Local public goods with weighted link formation," Games and Economic Behavior, Elsevier, vol. 132(C), pages 316-327.
    13. Dike Chukwudi Henry, 2021. "Network Games, Peer Effect and Neutral Transfers," Studies in Economics 2107, School of Economics, University of Kent.

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    More about this item

    Keywords

    Public goods; Income redistribution; Welfare effect; Networks; Bonacich transfer index;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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