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Table of Contents

Acknowledgements ix Chapter 1: Introduction 1 1.1 Themes 1 1.2 Networks in Economics 4 1.3 The Economic Approach and Other Subjects 7 1.4 A Note on Style 8 Chapter 2: Networks: Concepts and Empirics 9 2.1 Introduction 9 2.2 Concepts 9 2.3 Properties of Empirical Networks 20 Chapter 3: Games on Networks 25 3.1 Introduction 25 3.2 General Model 27 3.3 Applications 34 3.4 Discussion of Two Assumptions 49 3.5 Concluding Remarks 53 3.6 Appendix 55 Chapter 4: Coordination and Cooperation 63 4.1 Introduction 63 4.2 Coordination Games 66 4.3 Games of Conflict 75 4.4 Concluding Remarks 80 4.5 Appendix 81 Chapter 5: Social Learning 87 5.1 Introduction 87 5.2 Theoretical Framework 89 5.3 Learning from Neighbors 94 5.4 Related Themes 102 5.5 Concluding Remarks 104 5.6 Appendix 105 Chapter 6: Social Networks in Labor Markets 113 6.1 Introduction 113 6.2 The Social Transmission of Job Information 116 6.3 Adverse Selection and Referrals 120 6.4 The Use of Social Networks: Empirical Evidence 124 6.5 Concluding Remarks 128 6.6 Appendix 128 Chapter 7: Strategic Network Formation: Concepts 143 7.1 Introduction 143 7.2 One-Sided Links 147 7.3 Two-Sided Links 150 7.4 Efficiency and Equity 158 7.5 Concluding Remarks 158 7.6 Appendix 159 Chapter 8: One-Sided Link Formation 163 8.1 Introduction 163 8.2 A Simple Model of Link Formation 165 8.3 Extensions 171 8.4 Experiments and Empirical Regularities 182 8.5 Research in Other Subjects 185 8.6 Concluding Remarks 188 8.7 Appendix 188 Chapter 9: Two-Sided Link Formation 199 9.1 Introduction 199 9.2 Network Formation: Four Applications 200 9.3 Stability and Efficiency 215 9.4 Unequal Degrees and Payoffs 221 9.5 Concluding Remarks 227 9.6 Appendix 229 Chapter 10: Research Collaboration among Firms 245 10.1 Introduction 245 10.2 Why Extensive and Nonexclusive Links? 247 10.3 Collaboration among Competing Firms 249 10.4 Related Themes 259 10.5 Empirical Patterns 262 10.6 Concluding Remarks 265 10.7 Appendix 266 References 271 Index 285

Promotional Information

The economy ... will be one of the greatest beneficiaries of network thinking. Goyal's Connections, the first comprehensive treatment of network economics, is an important step in this fascinating journey. -- Albert-Laszlo Barabasi, Department of Physics, Northeastern University This book provides a comprehensive account of the antecedents and consequences of networks. Scholars who are interested in a boundary-spanning account of this important phenomenon will find this book to be extremely valuable. -- Ranjay Gulati, Harvard Business School Networks is becoming a new and exciting interdisciplinary research area integrating ideas from many fields, including sociology, economics, and computer science, in each case studying how networks and the social setting affect outcomes. Connections provides an excellent introduction to this emerging area from an economic perspective, and will be invaluable for researchers interested in any aspect of the subject. -- Eva Tardos, Department of Computer Science, Cornell University Sanjeev Goyal presents a clear and comprehensive account of the work in this field to which he is a major contributor. Connections analyzes two important questions. How does the structure of the network of interactions influence economic outcomes and how do networks evolve if people can consciously choose those with whom they want to be linked? -- Alan Kirman, L'Ecole des Hautes Etudes en Sciences Sociales, Universite D'Aix Marseille III, Institut Universitaire de France This book is an excellent introduction to the theory of social networks and should be the top choice for any graduate student interested in the subject. -- Markus Mobius, Department of Economics, Harvard University Connections provides an overview of the new and exciting economic approach to social networks. Accessible to noneconomists and providing a wide range of illustrations, including information-sharing networks, research-collaboration networks among firms, and labor-market networks, the book addresses two main questions: How does a pattern of connections influence behaviors, the efficiency of outcomes, and the diffusion of information? And what are the incentives to establish connections in the first place? Highly recommended. -- Gabrielle Demange, L'Ecole des Hautes Etudes en Sciences Sociales, Paris Written by a pioneer and leading contributor in the field, Connections provides an authoritative account of the recent economic literature on networks. It discusses theoretical models, economic applications, and empirical evidence on networks in a clear, concise, and vivid fashion. Undoubtedly, this book will prove to be invaluable, both as a reference on network theory and as a textbook for advanced students in economic theory. -- Francis Bloch, GREQAM, Marseille; and University of Warwick

About the Author

Sanjeev Goyal is professor of economics at the University of Cambridge and a fellow of Christ's College. He is one of the pioneers in the economic study of networks, and his work has appeared in leading international journals such as "Econometrica, Journal of Political Economy", the "Review of Economic Studies", and the "Journal of Economic Theory".


"This is a systematic account of a very new branch of economic theory that has applications to labour markets, industrial organization and the economics of innovation... Excellent."--Times Higher Education

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