Research Opportunities in Social and Economic Networks

Social network patterns of interaction influence many behaviors including consumption, career choice, employment, investment, voting, hobbies, criminal activity, risk sharing, and even participation in micro-finance. Networks of relationships among firms and political organizations also impact research and development, investment decisions and market activity, international trade patterns, and political alliances. The study of how network structure influences (and is influenced by) economic activity is becoming increasingly important because it is clear that many classical models that abstract away from patterns of interaction leave certain phenomena unexplained. For example, the fact that information about jobs is largely disseminated through social networks has significant implications for patterns of wages, unemployment, and education. Beyond the many economic settings where social structure is critical, the study of social and economic networks can also benefit from an economic perspective. Tools from decision theory and game theory can offer new insight into how behavior is influenced by network structure; and can also be used to analyze network formation. In addition network analysis provides new opportunities and challenges for econometrics, laboratory and field experiments; and they are beginning to shed new light on the impact of social interactions ranging from favor exchange to corruption and economic development