An Economic Model of Friendship: Homophily, Minorities and Segregation

Currarini, Sergio; Jackson, Matthew O.; Pin, Paolo

doi:10.2139/ssrn.1021650

Cited by 324 publications

(494 citation statements)

References 21 publications

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“…More recent work include Aslund et al (2013), Bayer et al (2008), Beaman and Magruder (2012), Bentolila et al (2010), Brown et al (2012), Cingano and Rosolia (2012), Dustmann et al (2011), Galenianos (2011, Kramarz and Skans, Kramarz and Thesmar (2006), see section 2 for a detailed discussion regarding results therein. It is also well documented that inbreeding (or "'homophily"') is a fundamental phenomenon of social networks (McPherson et al, 2001;Currarini et al, 2009). …”

Section: Introductionmentioning

confidence: 99%

Social Networks, Employee Selection, and Labor Market Outcomes

Hensvik

Skans

2016

Journal of Labor Economics

128

127

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for Evaluation of Labour Market and Education Policy (IFAU) is a research institute under the Swedish Ministry of Employment, situated in Uppsala. IFAU's objective is to promote, support and carry out scientific evaluations. The assignment includes: the effects of labour market and educational policies, studies of the functioning of the labour market and the labour market effects of social insurance policies. IFAU shall also disseminate its results so that they become accessible to different interested parties in Sweden and abroad. Terms of use: Documents inIFAU also provides funding for research projects within its areas of interest. The deadline for applications is October 1 each year. Since the researchers at IFAU are mainly economists, researchers from other disciplines are encouraged to apply for funding.IFAU is run by a Director-General. The institute has a scientific council, consisting of a chairman, the Director-General and five other members. Among other things, the scientific council proposes a decision for the allocation of research grants. A reference group including representatives for employer organizations and trade unions, as well as the ministries and authorities concerned is also connected to the institute. Papers published in the Working Paper Series should, according to the IFAU policy, have been discussed at seminars held at IFAU and at least one other academic forum, and have been read by one external and one internal referee. They need not, however, have undergone the standard scrutiny for publication in a scientific journal. The purpose of the Working Paper Series is to provide a factual basis for public policy and the public policy discussion. Abstract The paper studies how social job finding networks affect firms' selection of employees and the setting of entry wages. Our point of departure is the Montgomery (1991) model of employee referrals which suggests that it is optimal for firms to hire new workers through referrals from their most productive existing employees, as these employees are more likely to know others with high unobserved productivity. Empirically, we identify the networks through coworker links within a rich matched employer-employee data set with cognitive and non-cognitive test scores serving as predetermined indicators of individual productivity. The results corroborate the Montgomery model's key predictions regarding employee selection patterns and entry wages into skill intensive jobs. Incumb...

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Section: Introductionmentioning

confidence: 99%

Social Networks, Employee Selection, and Labor Market Outcomes

Hensvik

Skans

2016

Journal of Labor Economics

128

127

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“…Homophily refers to a tendency of various types of individuals to associate with others who are similar to themselves, and homophily is generally a quite strong and robust phenomenon [13]. Often, in the social science, homophily is just the tendency of people that are exogenously similar to connect together, but in this paper, we enlarge the concept of homophily and consider it can happen due to two reasons.…”

Section: Homophilymentioning

confidence: 99%

“…Furthermore, we next introduce the concepts of "homophily index", "relative homophily", "baseline homophily", "inbreeding homophily" and "heterophily" which have been defined by Currarini, et al [13]. These concepts discuss the relationship between the relative fraction of type k in the population and the homophily index H k defined as follows, which can take a closer look at homophily pattern and provide insights into innovation adoption.…”

Section: Homophilymentioning

confidence: 99%

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Exploring the Characteristics of Innovation Adoption in Social Networks: Structure, Homophily, and Strategy

Luo

et al. 2013

Entropy

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Exploration of the characteristics of innovation adoption in the context of social network will add new insights beyond the traditional innovation models. In this paper, we establish a new agent-based model to simulate the behaviors of agents in terms of innovation adoption. Specifically, we examine the effects of the network structure, homophily and strategy, among which homophily is a new topic in this field of innovation adoption. The experiments illustrate six important findings involving five aspects and their influences on the innovation adoption. The five aspects are initial conditions, homophily, network topology, rules of updating and strategy, respectively. This paper also compares the different cases within one aspect or across several aspects listed above. Accordingly, some management advices and future work are provided in the last part of this paper.

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“…We consider a group "mutually optimal" if it is optimal for all of its members. 4 In this general setting, when contribution costs are large compared to connection costs or, equivalently, connection costs are persistently low, agents desire more connections. However, such expansion introduces the risk of free-riding.…”

Section: Introductionmentioning

confidence: 99%

Choosing peers: Homophily and polarization in groups

Baccara

Yariv

2016

Journal of Economic Theory

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Abstract.This paper studies the formation of peer groups entailing the joint production of public goods. In our model agents choose their peers and have to pay a connection cost for each member added to the group. After groups are formed, each agent selects a public project to make a costly contribution to, and all members of the group experience the bene…ts of these contributions. Since agents di¤er in how much they value one project relative to the other, the group's preferences a¤ect the generated pro…le of public goods. We characterize mutually optimal groups, groups that are optimal for all their members. When contribution costs are low relative to connection costs, mutually optimal groups must be su¢ ciently homogeneous. As contribution costs increase relative to connection costs, agents desire more connections, which in turn raises the risk of free riding. Extreme peers are then more appealing, since they are more willing to contribute, and polarization arises.

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An Economic Model of Friendship: Homophily, Minorities and Segregation

Cited by 324 publications

References 21 publications

Social Networks, Employee Selection, and Labor Market Outcomes

Social Networks, Employee Selection, and Labor Market Outcomes

Exploring the Characteristics of Innovation Adoption in Social Networks: Structure, Homophily, and Strategy

Choosing peers: Homophily and polarization in groups

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