Making Friends: the Role of Assortative Interests and Capacity Constraints

Antonio Jimenez-Martinez and Isabel Melguizo

No DTE 628, Working Papers from CIDE, División de Economía

Abstract: We investigate the properties of stability and efficiency of friendship networks when individuals (i) have arbitrary levels of assortative interests and (ii) are capacity- constrained in their efforts to form connections. For intermediate levels of assorta- tive 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 be- tween 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 assorta- tive 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.

Keywords: Friendship networks; Assortative interests; Homophily; Heterophily; Diversity; Integration (search for similar items in EconPapers)
JEL-codes: A12 A14 D01 D71 D85 J15 Z13 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2021-07
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Related works:
Journal Article: Making friends: The role of assortative interests and capacity constraints (2022)
Working Paper: Making friends: the role of assortative interests and capacity constraints (2022)
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