Mark Granovetter has written a deep and wide-ranging book on economy and society entitled Society and Economy: Frameworks and Principles. Economists, in particular, will find his discussion on the role of social networks in understanding the problem of aggregation—from micro foundations to large-scale institutional phenomena—especially relevant. And they will find much to ponder over the ways in which overlapping structures—of networks and institutions—shape human behavior and determine aggregate economic outcomes. The high-level and parsimonious style of this book is distinctive and sets it apart from much of contemporary social science. This style and the apparent unwillingness to engage closely with research developments over the past two decades may, however, mean that the book will have limited influence on ongoing and future research. (JEL D02, D90, Z13)

When payoffs from different actions are unknown, agents use their own past experience as well as the experience of their neighbors to guide their decision making. In this paper, the authors develop a general framework to study the relationship between the structure of these neighborhoods and the process of social learning. They show that, in a connected society, local learning ensures that all agents obtain the same payoffs in the long run. Thus, if actions have different payoffs, then all agents choose the same action, and social conformism obtains. The authors develop conditions on the distribution of prior beliefs, the structure of neighborhoods and the informativeness of actions under which this action is optimal. In particular, they identify a property of neighborhood structures--local independence--which greatly facilitates social learning. Simulations of the model generate spatial and temporal patterns of adoption that are consistent with empirical work. Copyright 1998 by The Review of Economic Studies Limited.

We present an approach to network formation based on the notion that social networks are formed by individual decisions that trade off the costs of forming and maintaining links against the potential rewards from doing so. We suppose that a link with another agent allows access, in part and in due course, to the benefits available to the latter via his own links. Thus individual links generate externalities whose value depends on the level of decay/delay associated with indirect links. A distinctive aspect of our approach is that the costs of link formation are incurred only by the person who initiates the link. This allows us to formulate the network formation process as a noncooperative game. We first provide a characterization of the architecture of equilibrium networks. We then study the dynamics of network formation. We find that individual efforts to access benefits offered by others lead, rapidly, to the emergence of an equilibrium social network, under a variety of circumstances. The limiting networks have simple architectures, e.g., the wheel, the star, or generalizations of these networks. In many cases, such networks are also socially efficient.

The interaction between community and markets remains a central theme in the social sciences. The empirical evidence is rich: in some instances, markets strengthen social ties, while in others they undermine them. The impact of markets on inequality and welfare also varies widely. This paper develops a model where individuals in a social network choose whether to participate in their network and whether to participate in the market. We show that individual behavior is defined by the q-core of the network and the key to understanding the conflicting evidence is whether the market and the network are complements or substitutes. (JEL D63, D85, J15, L82, O15, Z13, Z31)

Empirical work shows that a large majority of individuals get most of their information from a very small subset of the group, viz., the influencers; moreover, there exist only minor differences between the observable characteristics of the influencers and the others. We refer to these empirical findings as the Law of the Few. This paper develops a model where players personally acquire information and form connections with others to access their information. Every (robust) equilibrium of this model exhibits the law of the few. (JEL D83, D85, Z13)

We study games in which a network mediates strategic spillovers and externalities among the players. How does a planner optimally target interventions that change individuals' private returns to investment? We analyze this question by decomposing any intervention into orthogonal principal components , which are determined by the network and are ordered according to their associated eigenvalues. There is a close connection between the nature of spillovers and the representation of various principal components in the optimal intervention. In games of strategic complements (substitutes), interventions place more weight on the top (bottom) principal components, which reflect more global (local) network structure. For large budgets, optimal interventions are simple—they essentially involve only a single principal component.

We connect gender disparities in research output and collaboration patterns in economics. We first document large gender gaps in research output. These gaps persist across fifty years despite a significant increase in the fraction of women in economics during that time. We further show that output differences are closely related to differences in the coauthorship networks of men and women: women have fewer collaborators, collaborate more often with the same coauthors, and a higher fraction of their coauthors collaborate with each other. Taking into account coauthorship networks reduces the gender output gap by 18%.

We study the evolution of social distance among economists over the period 1970–2000. While the number of economists has more than doubled, the distance between them, which was already small, has declined significantly. The key to understanding the short average distances is the observation that economics is spanned by a collection of interlinked stars. A star is an economist who writes with many other economists, most of whom have few coauthors and generally do not write with each other.

In contexts ranging from public goods provision to information collection, a player's well-being depends on his or her own action as well as on the actions taken by his or her neighbours. We provide a framework to analyse such strategic interactions when neighbourhood structure, modelled in terms of an underlying network of connections, affects payoffs. In our framework, individuals are partially informed about the structure of the social network. The introduction of incomplete information allows us to provide general results characterizing how the network structure, an individual's position within the network, the nature of games (strategic substitutes vs. complements and positive vs. negative externalities) and the level of information shape individual behaviour and payoffs.

We study how knowledge about the social network of an individual researcher, as embodied in his coauthor relations, helps us in developing a more accurate prediction of his or her future productivity. We find that incorporating information about coauthor networks leads to a modest improvement in the accuracy of forecasts on individual output, over and above what we can predict based on the knowledge of past individual output. Second, we find that the informativeness of networks dissipates over the lifetime of a researcher's career. This suggests that the signaling content of the network is quantitatively more important than the flow of ideas.