Connections: An Introduction to the Economics of Networks Book

Acknowledgements ix

1 Introduction 1

1.1 Themes 1

1.2 Networks in Economics 4

1.3 The Economic Approach and Other Subjects 7

1.4 A Note on Style 8

2 Networks: Concepts and Empirics 9

2.1 Introduction 9

2.2 Concepts 9

2.3 Properties of Empirical Networks 20

3 Games on Networks 25

3.1 Introduction 25

3.2 General Model 27

3.3 Applications 34

3.4 Discussion of Two Assumptions 49

3.5 Concluding Remarks 53

3.6 Appendix 55

4 Coordination and Cooperation 63

4.1 Introduction 63

4.2 Coordination Games 66

4.3 Games of Conflict 75

4.4 Concluding Remarks 80

4.5 Appendix 81

5 Social Learning 87

5.1 Introduction 87

5.2 Theoretical Framework 89

5.3 Learning from Neighbors 94

5.4 Related Themes 102

5.5 Concluding Remarks 104

5.6 Appendix 105

6 Social Networks in Labor Markets 113

6.1 Introduction 113

6.2 The Social Transmission of Job Information 116

6.3 Adverse Selection and Referrals 120

6.4 The Use of Social Networks: Empirical Evidence 124

6.5 Concluding Remarks 128

6.6 Appendix 128

7 Strategic Network Formation: Concepts 143

7.1 Introduction 143

7.2 One-Sided Links 147

7.3 Two-Sided Links 150

7.4 Efficiency and Equity 158

7.5 Concluding Remarks 158

7.6 Appendix 159

8 One-Sided Link Formation 163

8.1 Introduction 163

8.2 A Simple Model of Link Formation 165

8.3 Extensions 171

8.4 Experiments and Empirical Regularities 182

8.5 Research in Other Subjects 185

8.6 Concluding Remarks 188

8.7 Appendix 188

9 Two-Sided Link Formation 199

9.1 Introduction 199

9.2 Network Formation: Four Applications 200

9.3 Stability and Efficiency 215

9.4 Unequal Degrees and Payoffs 221

9.5Concluding Remarks 227

9.6 Appendix 229

10 Research Collaboration among Firms 245

10.1 Introduction 245

10.2 Why Extensive and Nonexclusive Links? 247

10.3 Collaboration among Competing Firms 249

10.4 Related Themes 259

10.5 Empirical Patterns 262

10.6 Concluding Remarks 265

10.7 Appendix 266

References 271

Index 285