This paper presents an experimental investigation of persuasion bias, a form of bounded rationality whereby agents communicating through a social network are unable to account for possible repetitions in the information they receive. The results indicate that network structure plays a...

A large portion of our economic interactions involves a very small portion of the population. We seem to prefer familiar venues. But the tendency to focus our attention on a few individuals or activities is an attribute that is typically omitted in our characterization of markets. In markets...

While interest in social determinants of individual behavior has led to a rich theoretical literature and many efforts to measure these influences, a mature social econometrics has yet to emerge. This chapter provides a critical overview of the identification of social interactions. We consider...

This paper studies an evolutionary model of network formation with endogenous decay, in which agents benefit both from direct and indirect connections. In addition to forming (costly) links, agents choose actions for a coordination game that determines the level of decay of each link. We address...

This paper models the dynamic process through which a large society may succeed in building up its "social capital" by establishing a stable and dense pattern of interaction among its members. In the model, agents interact according to a collection of infinitely repeated Prisoner's Dilemmas...

This paper studies network formation in settings where players are heterogeneous with respect to benefits as well as the costs of forming links. Our results demonstrate that centrality, center-sponsorship and short network diameter are robust features of equilibrium networks. We find that in a...

A fundamental question in social sciences is how trust emerges. We provide an answer which relies on the formation of social and economic relationships. We argue that behind trust lies the fact that individuals invest in connections taking into account the potential externalities networks...

I study a one-way flow connections model in which players are heterogeneous with respect to values and the costs of establishing a link. I first show that values and costs asymmetries are crucial in determining the level of connectedness of a network. Interestingly, unconnected equilibria are...

It is widely recognized that the shape of networks influences both individual and aggregate behavior. This raises the question which types of networks are likely to arise. Our paper fits into the literature that addresses this question. The paper continues on the work of Galeotti, Goyal and...

Social networks, be it on the internet or in real life, facilitate information flows. We model this by giving agents incentives to link with others and receive information through those links. In many networks agents will value confirmation of the information they receive from others. Our paper...