Friendship Formation, Oppositional Identity, and Segregation∗

The aim of this paper is to explain how friendships form, especially between races, and how it can explain (social) segregation or integration between communities. For that, we develop an explicit model of network formation where individuals receive direct and indirect benefits from friendship connections but have to pay some costs for interacting with people. Individuals from each community are born with a trait (black or white) that affects their easiness to interact with other individuals. It is always less costly to interact with someone from the same community than from the other community. Furthermore, the interracial costs depend on the choice of same-race friends each individual makes. It is indeed more difficult for a black person to be friend with a white if the latter has most of her friends who are also whites. The reciprocal is also true. We show that, when the within-community costs are low, oppositional identities (i.e. some blacks have most of their friends who are blacks while others have mainly white friends) tend not to emerge, even though bridge links between communities exist. When within-community costs become higher, then oppositional identities are more likely to exist in equilibrium because once blacks connect to whites, they become more attractive and hence can form new links more easily with the other community. We extend the model to include social norms so that a black who has a lot of white friends is still “attractive” for whites but becomes unattractive for other blacks because she is losing in some sense her initial black identity. This induces even more oppositional identities because, once a black has chosen to have many white friends, it is difficult for her to have black friends.