Geography and social links shape economic interactions. In industries, schools, and markets, the entire network determines outcomes. This paper analyzes a large class of games and obtains a striking result. Equilibria depend on a single network measure: the lowest eigenvalue. This paper is the...

In the benchmark model of Bala and Goyal (2000) on network formation, the equilibrium network is asymmetric and unfair as agents have different payoffs. While they are prominent in reality, asymmetric networks do not emerge in the lab mainly because of fairness concerns. We extend this model...

We examine the informal exchange of favors in societies such that any two individuals interact too infrequently to sustain exchange, but such that the social pressure of the possible loss of multiple relationships can sustain exchange. Patterns of exchange that are locally enforceable and...

I discuss a fundamental and pervasive aspect of social networks that has a signfii cant impact on behavior: "homophily. "Homophily refers to the tendency of individuals to associate with others who have similar characteristics as themselves. This tendency has been observed across a variety of...

We analyze the evolution of fashion based on a network game model. Each agent in this model is either a conformist or a rebel. A conformist prefers to take the action most common among her neighboring agents, whereas a rebel prefers the opposite. When there is only one type of agent, the model...

We investigate the role of conflicting interests in a boundedly rational model of belief dynamics. Individuals have different preferences about the action to take, are subject to persuasion bias and repeatedly communicate with their neighbors in a social network. They communicate strategically...

We study a dynamic model of opinion formation in social networks. In our model, boundedly rational agents update opinions by averaging over their neighbors' expressed opinions, but may misrepresent their own opinion by conforming or counter-conforming with their neighbors. We show that an...

Most network games assume that the best response of a player is a linear function of the actions of her neighbors; clearly, this is a restrictive assumption. We developed a theory called sign-equivalent transformation (SET) underlying the mathematical structure behind a system of equations...

We study cooperation and group pressure in social networks by introducing a new concept termed moral ties. By combining network characteristics and agents’ actions, moral ties extend and refine the concept of social ties as a driver for group pressure. Direct moral ties depend on the size of...

In this paper I discuss what we have learned about how the structure of social networks impacts economic behaviors, and why it is important to include network information in many economic studies. I also discuss some issues of estimating models of network formation, and some of the challenges of...