We study some recent developments and challenges in the empirics of the effects of social networks. We focus in particular on researchers' ability to make policy recommendations based on a standard linear econometric model. We examine the potential compatibility between this type of econometric...

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 preference for being part of a clique) may result in very high levels of homophily at equilibrium. I present an empirical...