Making Friends: the Role of Assortative Interests and Capacity Constraints

Antonio Jiménez-Martínez e Isabel Melguizo-López, Profesores Investigadores Titulares de la División de Economía del CIDE, escribieron el documento de trabajo Making Friends: the Role of Assortative Interests and Capacity Constraints.

 

Abstract

We investigate the properties of stability and efficiency of friendship networks when individuals (i) have arbitrary levels of assortative interests and (ii) are capacityconstrained in their efforts to form connections. For intermediate levels of assortative interests, extreme forms of homophilic (or heterophilic) patterns may coexist as stable with more moderate homophilic patterns. In general, though, there is a natural positive relation between levels of assortative interests and homophily levels of stable patterns. For extreme forms of homophilic (resp., heterophilic) patterns to be stable, connections between agents with different (resp., same) characteristics must have a certain minimal (good) quality as well. The homophily features of stable networks are affected by the tightness of the capacity constraint and by the discrepancies between sizes of different-characteristic groups. Efficiency requires common aggregate qualities of connections (with respect to same-characteristic agents, on one side, and with respect to different-characteristic agents, on the other side) across all individuals within each different population group. Under very high (resp., low) levels of assortative interests, some particular forms of only extreme homophilic (resp., heterophilic) patterns are simultaneously stable and efficient. For intermediate levels of assortative interests, we identify a class of friendship networks that feature intermediate levels of homophily, and for which stability and efficiency are compatible.

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