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How Homophily Affects Learning and Diffusion in Networks

Author

Listed:
  • Golub, Benjamin
  • Jackson, Matthew O.
Abstract
We examine how three different communication processes operating through social networks are affected by homophily - the tendency of individuals to associate with others similar to themselves. Homophily has no effect if messages are broadcast or sent via shortest paths; only connection density matters. In contrast, homophily substantially slows learning based on repeated averaging of neighbors' information and Markovian diffusion processes such as the Google random surfer model. Indeed, the latter processes are strongly affected by homophily but completely independent of connection density, provided this density exceeds a low threshold. We obtain these results by establishing new results on the spectra of large random graphs and relating the spectra to homophily. We conclude by checking the theoretical predictions using observed high school friendship networks from the Adolescent Health dataset.

Suggested Citation

  • Golub, Benjamin & Jackson, Matthew O., 2009. "How Homophily Affects Learning and Diffusion in Networks," Sustainable Development Papers 50718, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemdp:50718
    DOI: 10.22004/ag.econ.50718
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    References listed on IDEAS

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    1. Glenn Ellison, 2000. "Basins of Attraction, Long-Run Stochastic Stability, and the Speed of Step-by-Step Evolution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(1), pages 17-45.
    2. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
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    5. Banerjee, Abhijit & Fudenberg, Drew, 2004. "Word-of-mouth learning," Games and Economic Behavior, Elsevier, vol. 46(1), pages 1-22, January.
    6. Sergio Currarini & Matthew O. Jackson & Paolo Pin, 2009. "An Economic Model of Friendship: Homophily, Minorities, and Segregation," Econometrica, Econometric Society, vol. 77(4), pages 1003-1045, July.
    7. Peter M. DeMarzo & Dimitri Vayanos & Jeffrey Zwiebel, 2003. "Persuasion Bias, Social Influence, and Unidimensional Opinions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 909-968.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Cowan, Robin & Kamath, Anant, 2012. "Informal knowledge exchanges under complex social relations: A network study of handloom clusters in Kerala, India," MERIT Working Papers 2012-031, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Bramoullé, Yann & Saint-Paul, Gilles, 2010. "Social networks and labor market transitions," Labour Economics, Elsevier, vol. 17(1), pages 188-195, January.
    3. Pichler, Michael, 2011. "The economics of cultural formation of preferences," Center for Mathematical Economics Working Papers 431, Center for Mathematical Economics, Bielefeld University.
    4. Kamath, Anant, 2013. "Interactive knowledge exchanges under complex social relations: A simulation model of a developing country cluster," Technology in Society, Elsevier, vol. 35(4), pages 294-305.

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    More about this item

    Keywords

    Institutional and Behavioral Economics;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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