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The Cost of Segregation in Social Networks

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  • Allouch, Nizar

Abstract

This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an “asymptotic neutrality” of redistributive policies.

Suggested Citation

  • Allouch, Nizar, 2013. "The Cost of Segregation in Social Networks," Climate Change and Sustainable Development 151383, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:151383
    DOI: 10.22004/ag.econ.151383
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    File URL: https://ageconsearch.umn.edu/record/151383/files/NDL2013-052.pdf
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    Cited by:

    1. Meléndez-Jiménez, Miguel A. & Polanski, Arnold, 2020. "Dirty neighbors — Pollution in an interlinked world," Energy Economics, Elsevier, vol. 86(C).
    2. 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.
    3. Mohanty, Sambit & Rao, K.S. Mallikarjuna & Roy, Jaideep, 2024. "Kantian imperatives in public goods networks," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 194-214.
    4. Allouch, Nizar & Bhattacharya, Jayeeta, 2025. "The Key Class in Networks," European Economic Review, Elsevier, vol. 172(C).
    5. Gerke, Stefanie & Gutin, Gregory & Hwang, Sung-Ha & Neary, Philip R., 2024. "Public goods in networks with constraints on sharing," Journal of Economic Theory, Elsevier, vol. 219(C).
    6. Kinateder, Markus & Merlino, Luca Paolo, 2022. "Local public goods with weighted link formation," Games and Economic Behavior, Elsevier, vol. 132(C), pages 316-327.
    7. Allouch, Nizar & King, Maia, 2021. "Welfare targeting in networks," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    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. Bayer, Péter & Herings, P. Jean-Jacques & Peeters, Ronald, 2021. "Farsighted manipulation and exploitation in networks," Journal of Economic Theory, Elsevier, vol. 196(C).
    10. Chen, Ying & Lane, Tom & McDonald, Stuart, 2025. "Endogenous network formation in local public goods: An experimental analysis," Games and Economic Behavior, Elsevier, vol. 150(C), pages 198-214.
    11. King, Maia & Tarbush, Bassel & Teytelboym, Alexander, 2019. "Targeted carbon tax reforms," European Economic Review, Elsevier, vol. 119(C), pages 526-547.
    12. Toomas Hinnosaar, 2019. "Price Setting on a Network," Papers 1904.06757, arXiv.org.
    13. 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.
    14. Argyrios Deligkas & Gregory Gutin & Mark Jones & Philip R. Neary & Anders Yeo, 2025. "Public Goods Games in Directed Networks with Constraints on Sharing," Papers 2511.11475, arXiv.org.
    15. Walsh, A. M., 2019. "Games on Multi-Layer Networks," Cambridge Working Papers in Economics 1954, Faculty of Economics, University of Cambridge.
    16. Dike Chukwudi Henry, 2021. "Network Games, Peer Effect and Neutral Transfers," Studies in Economics 2107, School of Economics, University of Kent.

    More about this item

    Keywords

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    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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