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Identity and Social Distance in Friendship Formation

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Abstract

We analyze a network formation model where agents belong to different communities. 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. Two individuals from the same community always face a low linking cost and the cost of forming a relationship for two individuals of different communities diminishes with the rate of exposure of each of them to the other community. We derive a number of results with regard to equilibrium networks. In particular, socialization among the same type of agents can be weak even if the within-type link cost is very low and oppositional identity patterns can arise for a wide range of parameters. Our model also suggests that policies aiming at reducing segregation are socially desirable only if they reduce the within-community cost differential by a sufficiently large amount.

Suggested Citation

  • de Marti, Joan & Zenou, Yves, 2011. "Identity and Social Distance in Friendship Formation," Research Papers in Economics 2011:13, Stockholm University, Department of Economics.
    • Handle: RePEc:hhs:sunrpe:2011_0013
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    References listed on IDEAS

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    1. David Austen-Smith & Ronald G. Fryer, 2005. "An Economic Analysis of 'Acting White'," Discussion Papers 1399, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Yann Bramoullé & Brian W. Rogers, 2009. "Diversity and Popularity in Social Networks," Cahiers de recherche 0903, CIRPEE.
    3. Ben-Ner, Avner & McCall, Brian P. & Stephane, Massoud & Wang, Hua, 2009. "Identity and in-group/out-group differentiation in work and giving behaviors: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 153-170, October.
    4. David Austen-Smith & Roland G. Fryer, 2005. "An Economic Analysis of "Acting White"," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 551-583.
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    Cited by:

    1. Pascal Mossay & Pierre Picard, 2019. "Spatial segregation and urban structure," Journal of Regional Science, Wiley Blackwell, vol. 59(3), pages 480-507, June.
    2. Christian Ghiglino & Antonella Nocco, 2017. "When Veblen meets Krugman: social network and city dynamics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 63(2), pages 431-470, February.
    3. Giovanni Facchini & Eleonora Patacchini & Max F. Steinhardt, 2015. "Migration, Friendship Ties, and Cultural Assimilation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 619-649, April.
    4. Tarbush, Bassel & Teytelboym, Alexander, 2017. "Social groups and social network formation," Games and Economic Behavior, Elsevier, vol. 103(C), pages 286-312.

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    Keywords

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    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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