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A Simple Model of Homophily in Social Networks

Author

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  • Sergio Currarini

    ()

  • Jesse Matheson

    ()

  • Fernando Vega Redondo

    ()

Abstract

Biases in meeting opportunities have been recently shown to play a key role for the emergence of homophily in social networks (see Currarini, Jackson and Pin 2009). The aim of this paper is to provide a simple microfoundation of these biases in a model where the size and typecomposition of the meeting pools are shaped by agents' socialization decisions. In particular, agents either inbreed (direct search only to similar types) or outbreed (direct search to population at large). When outbreeding is costly, this is shown to induce stark equilibrium behavior of a threshold type: agents \inbreed" (i.e. mostly meet their own type) if, and only if, their group is above certain size. We show that this threshold equilibrium generates patterns of in-group and cross-group ties that are consistent with empirical evidence of homophily in two paradigmatic instances: high school friendships and interethnic marriages.

Suggested Citation

  • Sergio Currarini & Jesse Matheson & Fernando Vega Redondo, 2016. "A Simple Model of Homophily in Social Networks," Discussion Papers in Economics 16/05, Department of Economics, University of Leicester.
  • Handle: RePEc:lec:leecon:16/05
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    File URL: http://www.le.ac.uk/economics/research/repec/lec/leecon/dp16-05.pdf
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    References listed on IDEAS

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    1. Matthew O. Jackson & Brian W. Rogers, 2005. "The Economics of Small Worlds," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 617-627, 04/05.
    2. 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, July.
    3. Wing Suen, 2010. "Mutual Admiration Clubs," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 123-132, January.
    4. Benjamin Golub & Matthew O. Jackson, 2012. "How Homophily Affects the Speed of Learning and Best-Response Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 127(3), pages 1287-1338.
    5. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    6. Galeotti, Andrea & Ghiglino, Christian & Squintani, Francesco, 2013. "Strategic information transmission networks," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1751-1769.
    7. Mariagiovanna Baccara & Leeat Yariv, 2013. "Homophily in Peer Groups," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 69-96, August.
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    Cited by:

    1. Paul A. Gompers & Kevin Huang & Sophie Q. Wang, 2017. "Homophily in Entrepreneurial Team Formation," NBER Working Papers 23459, National Bureau of Economic Research, Inc.
    2. repec:eee:phsmap:v:496:y:2018:i:c:p:571-592 is not listed on IDEAS
    3. repec:eee:eecrev:v:102:y:2018:i:c:p:1-18 is not listed on IDEAS

    More about this item

    Keywords

    Homophily; social networks; segregation.;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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