The Economics of Social Networks

Jackson, Matthew O.

doi:10.1017/ccol0521871522.001

Cited by 46 publications

(50 citation statements)

References 26 publications

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“…among agents. A growing body of theoretical work explores how individual incentives give rise to networks and, in turn, can be shaped by them (e.g., see Jackson 2006). At the empirical level, a few recent studies exploit datasets possessing rich information on relationships between agents in order to provide cleaner evidence on social effects.…”

Section: Introductionmentioning

confidence: 99%

Identification of peer effects through social networks

Bramoullé

Djebbari

Fortin

2009

Journal of Econometrics

1,060

881

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We provide new results regarding the identification of peer effects. We consider an extended version of the linear-in-means model where each individual has his own specific reference group. Interactions are thus structured through a social network. We assume that correlated unobservables are either absent, or treated as fixed effects at the component level. In both cases, we provide easy-to-check necessary and sufficient conditions for identification. We show that endogenous and exogenous effects are generally identified under network interaction, although identification may fail for some particular structures. Monte Carlo simulations provide an analysis of the effects of some crucial characteristics of a network (i.e., density, intransitivity) on the estimates of social effects. Our approach generalizes a number of previous results due

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Section: Introductionmentioning

confidence: 99%

Identification of peer effects through social networks

Bramoullé

Djebbari

Fortin

2009

Journal of Econometrics

1,060

881

View full text Add to dashboard Cite

show abstract

“…In contrast, most previous agent-based studies computed the aggregate diffusion dynamics only numerically. The studies that did calculate the aggregate dynamics analytically either employed some type of a mean-field approximation, or obtained analytical results for steady-state solutions, such as the fraction of the population that will become infected by an epidemic at equilibria (López-Pintado 2008, Jackson and Rogers 2007, Jackson 2006, Vega-Redondo 2006, Pastor-Satorrás and Vespignani 2001. Note that in all the agent-based models considered in this study, once an individual becomes an adopter, he remains so at all later times.…”

Section: Introductionmentioning

confidence: 99%

Aggregate Diffusion Dynamics in Agent-Based Models with a Spatial Structure

Fibich

Gibori

2010

Operations Research

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We explicitly calculate the aggregate diffusion dynamics in one-dimensional agent-based models of adoption of new products, without using the mean-field approximation. We then introduce a clusters-dynamics approach, and use it to derive an analytic approximation of the aggregate diffusion dynamics in multidimensional agent-based models. The clusters-dynamics approximation shows that the aggregate diffusion dynamics does not depend on the average distance between individuals, but rather on the expansion rate of clusters of adopters. Therefore, the grid dimension has a large effect on the aggregate adoption dynamics, but a small-world structure and heterogeneity among individuals have only a minor effect. Our results suggest that the one-dimensional model and the Bass model provide a lower bound and an upper bound, respectively, for the aggregate diffusion dynamics in agent-based models with "any" spatial structure.

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“…Worker allocation is probably the most extensively researched topic in the literature on the economics of social networks (Jackson, 2006). A literature review by Montgomery (1991) showed that about 50 percent of jobs for a variety of professions were found through social contacts.…”

Section: Social Capital and Worker Allocationmentioning

confidence: 99%

The Temptation of Social Ties: When Interpersonal Network Transactions Hurt Firm Performance

2012

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We introduce agency concerns to social capital theory and predict that managers can use individual social capital to reduce personal effort costs, which is not in the best interest of the firm. To test this prediction, we collect data on all 8,019 hiring decisions from general managers in the National Basketball Association between 1981 and 2011. We find that managers have a clear preference for hiring players through social ties. The probability that a manager hires players from an NBA franchise to which he is socially tied is 27.6% higher than for an untied franchise. To isolate the motivation for this behavior, we complement our data with information on the sporting performance of teams. In line with agency theory, we find that the hiring of players through social ties reduces team performance. The effect is large: on average, each social-tie player reduces team winning percentage by 5.4%. Overall, this paper documents first empirical evidence that decision makers' use of individual social capital can lead to reduced firm-level performance.

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The Economics of Social Networks

Cited by 46 publications

References 26 publications

Identification of peer effects through social networks

Identification of peer effects through social networks

Aggregate Diffusion Dynamics in Agent-Based Models with a Spatial Structure

The Temptation of Social Ties: When Interpersonal Network Transactions Hurt Firm Performance

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