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Clubs and Networks

Sihua Ding, Marcin Dziubiński and Sanjeev Goyal

No 20210073, Working Papers from New York University Abu Dhabi, Department of Social Science

Abstract: A recurring theme in the study of society is the concentration of influence and power that is driven through unequal membership of groups and associations. In some instances these bodies constitute a small world while in others they are fragmented into distinct cliques. This paper presents a new model of clubs and networks to understand the sources of individual marginalization and the origins of different club networks. In our model, individuals seek to become members of clubs while clubs wish to have members. Club value is increasing in its size and in the strength of ties with other clubs. We show that a stable membership proï¬ le exhibits marginalization of individuals and that this is generally not welfare maximizing. Our second result shows that if returns from strength of ties are convex (concave) then stable memberships support fragmented networks with strong ties (small worlds held together by weak ties). We illustrate the value of these theoretical results through case studies of inter-locking directorates, boards of editors of journals, and defence and R&D alliances.

Pages: 53 pages
Date: 2021-12, Revised 2021-12
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-mic, nep-net and nep-soc
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https://nyuad.nyu.edu/content/dam/nyuad/academics/ ... papers/2021/0073.pdf First version, 2021 (application/pdf)

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Working Paper: Clubs and Networks (2022) Downloads
Working Paper: Clubs and Networks (2021) Downloads
Working Paper: Clubs and Networks (2021) Downloads
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