In this paper we examine the role played by heterogeneity in the popular “connections model” of Jackson andWolinsky (1996). We prove that under heterogeneity in values or decay involving only two degrees of freedom, all networks can supported as Nash. Moreover, we show that Nash networks may not always exist. In the absence of decay, neither result can be found in a model with value heterogenei...

Can we identify the members of a community who are bestplaced to diffuse information simply by asking a random sample of individuals? We show that boundedly-rational individuals can, simply by tracking sources of gossip, identify those who are most central in a network according to “diffusion centrality,” which nests other standard centrality measures. Testing this prediction with data from 35 ...

o ne of the effective strategies for economic development of clusters is the conduct of networking activities by cluster members. indeed, the majority of cluster members are micro and small enterprises, so, should attempt to overcome their inherent constraints and influence the market through networking activities. in addition, these enterprises lack an intra-firm research and development unit ...

We examine the role of macroeconomic ‡uctuations, asset market liquidity, and network structure in determining contagion and aggregate losses in a …nancial system. Systemic instability is explored in a …nancial network comprising three distinct, but interconnected, sets of agents – domestic banks, international …nancial institutions, and …rms. Calibrating the model to advanced country banking s...

We study a stochastic model of influence where agents have yes-no inclinations on some issue, and opinions may change due to mutual influence among the agents. Each agent independently aggregates the opinions of the other agents and possibly herself. We study influence processes modelled by ordered weighted averaging operators. This allows to study situations where the influence process resembl...

This paper studies which social networks maximize trust and welfare when agreements are implicitly enforced. We study a repeated trust game in which trading opportunities arise exogenously and a social network determines the information each player has. We show that cohesive communities, modeled as social networks of complete components, emerge as the optimal community design. Cohesive communit...

We study how social networks change as a result of an exogenous expansion in formal financial access and show how to estimate the effects of these changes on household outcomes. We use a unique household panel dataset that contains detailed information on the network of informal financial transactions before and after a field experiment that randomized access to savings accounts in Nepal. First...