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Economic Analysis of Social Interactions
By Onur Ozgur
Email: onur dot ozgur at mbs dot ca
General Introduction
Lecture 1 - Why do we need a new class of models? What are the relevant questions answered that cannot be answered with the traditional models in economics? What empirical regularities beg for this class of models?
- VIDEO--> How social networks predict epidemics. Nice TED talk By Nicholas Christakis on how proper modelling of social network structures can help early-detect epidemics.
- ``Economic Analysis of Social Interactions," by Manski.
- ``Social Interactions and Economic Behavior," By Zanella.
- ``Social Interactions," by José Scheinkman (The New Palgrave).
- ``Non-Market Interactions" by Glaeser and Scheinkman.
- ``The New Social Economics," by Durlauf and Young (ch. 1 of Social Dynamics).
- ``Methodological Individualism and Social Knowledge," by Arrow.
- ``Political and Economic Evaluation of Social Effects and Externalities," by Arrow.
- ``The Impact of Gary Becker's Work on Sociology," by Coleman,
Network Foundations
Lecture 2 - The use of networks and game theory as the fundamental tools to study social and economic interactions.
- VIDEO--> Understanding Networks, Albert-László Barabási. Part of a mini conference at MIT Labs. You will see also the videos of other usual suspects in Network Theory.
- Networks, Crowds, and Markets (Easley and Kleinberg), [Online Access to their Book].
- Connections by Goyal, ch. 2, 3.
- Social and Economic Networks by Jackson, chs. 2, 3.
- ``The Strength of Weak Ties," by Granovetter.
- ``Power and Centrality: A Family of Measures" by Phillip Bonacich.
- ``Whos's Who in Networks. Wanted: The Key Player" by Ballester, Calvo-Armengol, and Zenou.
- ``A Brief Introduction to the Basics of Game Theory" by Jackson, on his webpage [LINK]
- Analytictech.com. Website by Steve Borgatti. Plenty of resources, course materials (also in Spanish), software on networks.
Behavioral Implications of Existing Group Structures
Lecture 3 - Local Interactions and the Baseline Models.
- ``Local Interactions" by Özgür.
- ``Random Economies with Many Interacting Agents", by Föllmer.
- ``Crime and Social Interactions,'' by Glaeser, Sacerdote, and Scheinkman
- ``Coordinating Coordination Failures in Keynesian Models," by Cooper and John.
- ``Micro Shocks and Aggregate Risk," by Jovanovic.
- ``Non-Market Interactions" by Glaeser and Scheinkman.
- Markov Random Fields and Their Applications by Kindermann and Snell.
Lecture 4 - Conformity, social norms, habits and addiction.
- ``Social Distance and Social Decisions," by Akerlof.
- ``Discrete Choice with Social Interactions,'' by Brock and Durlauf.
- ``A Theory of Conformity," by Bernheim.
- ``Social Norms," by Young (The New Palgrave).
- ``Social Norms," by Burke and Young.
- ``Social Norms and Preferences,'' by Postlewaite.
- ``Dynamic Linear Economies with Social Interactions,'' by Özgür and Bisin [SLIDES].
- ``A Theory of Rational Addiction," by Becker and Murphy.
- The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg.
- Addiction: Entries and Exits edited by Jon Elster.
- The Economics of Conformism by Jones.
Lecture 5 - Diffusion and contagion through networks.
- VIDEO--> Do Your Friends Make You Fat?. 5min Ignite Talk by James Fowler on Behavioral Contagion.
- Jackson Book, ch.7
- ``Diffusion, Strategic Interaction, and Social Structure," by Jackson and Yariv.
- ``Threshold Models of Collective Behavior" by Mark Granovetter.
- ``Payment Networks: A Review of Recent Research'', by Chapman et al.
- ``Contagion" by Morris.
- ``The Diffusion of Innovations in Social Networks," by Young.
Lecture 6 - Information transmission and learning in networks.
- SLIDES
- VIDEO--> We Know Drama! Viral advertising.
- ``Learning in Networks," by Goyal.
- ``Learning from Neighbors," by Bala and Goyal.
- ``A Simple Model of Herd Behavior," by Banerjee.
- ``Word-of-Mouth Learning," by Banerjee and Fudenberg.
- ``A two-armed Bandit Theory of Market Pricing," by Rothschild.
Group Formation and its Strategic Foundations
Lecture 7 and 8 - Why do people form groups? Can we explain observed groups as equilibrium phenomena? Stability and equilibrium, conflict between incentives and efficiency. Homophily, assortative matching, sorting into neighborhoods, and strategic formation of networks.
- Jackson Book, ch. 4,5, 6.
- ``Network Formation" by Jackson [LINK].
- ``The Study of Social Networks in Economics", by Jackson.
- ``Formation of Networks and Coalitions" by Bloch and Dutta.
- ``A Strategic Model of Social and Economic Networks," Jackson and Wolinsky.
- ``A Non-cooperative Model of Network Formation," by Bala and Goyal.
- ``An Economic Model of Friendship: Homophily, Minorities, and Segregation," by Currarini, Jackson, and Pin.
Identification and Estimation of Social Interactions
Lectures 9 and 10 - Identification and measurement of social effects is of utmost importance for social policy. What are the challanges? Do we have answers? Can equilibrium dynamics help? How does one estimate models with social interactions once models are identified?
- VIDEO--> Social experiments to fight poverty. Great talk by Ester Duflo (MIT) at the TED event on how intelligently designed social policies, taking into account social interactions, can save lives.
- ``The Identification of Structural Characteristics," by Koopmans and Reirsøl.
- ``Identification of Endogenous Social Effects: The Reflection Problem," by Manski.
- ``Measuring Social Interactions," by Glaeser and Scheinkman.
- ``Identification of Social Interactions," by Blume, Brock, Durlauf, and Ioannides.
- ``Identification of Peer Effects through Social Networks," by Bramoulle, Djebbari, and Fortin.
- ``Identifying Social Interactions through Excess Variance Contrasts," by Graham.
- ``Dynamic Linear Economies with Social Interactions," by Özgür and Bisin.
- Identification for Prediction and Decision by Manski.
- Identification Problems in the Social Sciences by Manski.