Abstract:This paper studies controlling segregation in social networks via exogenous incentives. We construct an edge formation game on a directed graph. A user (node) chooses the probability with which it forms an inter-or intra-community edge based on a utility function that reflects the tradeoff between homophily (preference to connect with individuals that belong to the same group) and the preference to obtain an exogenous incentive. Decisions made by the users to connect with each other determine the evolution of … Show more
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