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Identity and Social Distance in Friendship Formation

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.

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File URL: http://www2.ne.su.se/paper/wp11_13.pdf
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Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2011:13.

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Length: 52 pages
Date of creation: 01 Apr 2011
Date of revision:
Handle: RePEc:hhs:sunrpe:2011_0013
Contact details of provider: Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
Phone: +46 8 16 20 00
Fax: +46 8 16 14 25
Web page: http://www.ne.su.se/
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  1. 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.
  2. Yann Bramoullé & Brian W. Rogers, 2009. "Diversity and Popularity in Social Networks," Cahiers de recherche 0903, CIRPEE.
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