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Ethnic Identity and Social Distance in Friendship Formation

  • De Martí, Joan
  • Zenou, Yves

We analyze a model of network formation with agents that belong to different communities and an endogenous cost structure. Both individual benefits and costs depend on direct as well as indirect connections. Benefits of an indirect connection decrease with distance in the network, while the cost of a link depends on the type of agents involved in it as well as the rest of linkage decisions of both of them. Two individuals from the same community always face a low linking cost. The cost of forming a relationship for two individuals belonging to different communities diminishes with the rate of exposure of each of them to the other community. As a result, our model introduces endogenous social distances that rely on individual positions in the network. We derive a number of results with regard to equilibrium networks: (i) socialization among the same type of agents might be weak even if the within-type link cost is very low; (ii) oppositional identity patterns can arise for a wide range of parameters; (iii) integrated networks can be socially preferable to segregated networks.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7566.

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Date of creation: Nov 2009
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Handle: RePEc:cpr:ceprdp:7566
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  1. Yann Bramoulle & Brian Rogers, 2009. "Diversity and Popularity in Social Networks," Discussion Papers 1475, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June.
  3. Nekby, Lena & Rödin, Magnus, 2010. "Acculturation identity and employment among second and middle generation immigrants," Journal of Economic Psychology, Elsevier, vol. 31(1), pages 35-50, February.
  4. Constant, Amelie & Gataullina, Liliya & Zimmermann, Klaus F, 2006. "Ethnosizing Immigrants," CEPR Discussion Papers 5636, C.E.P.R. Discussion Papers.
  5. Amelie Constant & Klaus F. Zimmermann, 2007. "Measuring Ethnic Identity and Its Impact on Economic Behavior," Discussion Papers of DIW Berlin 721, DIW Berlin, German Institute for Economic Research.
  6. Sergio Currarini & Matthew O. Jackson & Paolo Pin, 2009. "An Economic Model of Friendship: Homophily, Minorities, and Segregation," Econometrica, Econometric Society, vol. 77(4), pages 1003-1045, 07.
  7. Fryer, Roland & Echenique, Federico, 2007. "A Measure of Segregation Based on Social Interactions," Scholarly Articles 2958220, Harvard University Department of Economics.
  8. Harris Selod & Yves Zenou, 2004. "City Structure, Job Search and Labor Discrimination. Theory and Policy Implications," Working Papers 2004-13, Centre de Recherche en Economie et Statistique.
  9. Patacchini, Eleonora & Zenou, Yves, 2006. "Racial Identity and Education," CEPR Discussion Papers 5607, C.E.P.R. Discussion Papers.
  10. Mayer, Adalbert & Puller, Steven L., 2008. "The old boy (and girl) network: Social network formation on university campuses," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 329-347, February.
  11. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
  12. Andrea Galeotti, 2006. "One-way flow networks: the role of heterogeneity," Economic Theory, Springer, vol. 29(1), pages 163-179, September.
  13. Roland G. Fryer, Jr. & Paul Torelli, 2005. "An Empirical Analysis of 'Acting White'," NBER Working Papers 11334, National Bureau of Economic Research, Inc.
  14. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May.
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