Equilibrium homophily in networks

Citation

Boucher, Vincent (2020). Equilibrium homophily in networks. European Economic Review. vol. 123

Abstract

I look at the equilibrium effects of homophily in network formation games having positive externalities. I show that very weak preferences for network effects (such as a preference for being part of a clique) may result in very high levels of homophily at equilibrium. I present an empirical procedure that allows an evaluation of the role of network effects on the observed level of homophily in the data. I apply my method to the formation of friendship networks in the USA. I show that network effects are small and have a negligible contribution to the observed racial homophily in friendship networks.

URL

https://doi.org/10.1016/j.euroecorev.2020.103370

Keyword(s)

Homophily

Reference Type

Journal Article

Journal Title

European Economic Review

Author(s)

Boucher, Vincent

Year Published

2020

Volume Number

123

DOI

10.1016/j.euroecorev.2020.103370

Reference ID

5873