Social interactions with endogenous associations
By: Bruce A. Weinberg.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- no. 13038.; Working paper series (National Bureau of Economic Research) -- working paper no. 13038.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 52
Subjects: Social groups -- Economic aspects; High school students -- Behavior
Description: This paper develops a model of social interactions with endogenous association. People are assumed to invest in relationships to maximize their utility. Even in a linear-in-means model, when associations are endogenous, the effect of macro-group composition on behavior is non-linear and varies across individuals. We also show that larger groups facilitate sorting. Using data on associations among high school students, we provide a range of evidence consistent with our model. Individuals associate with people whose behaviors and characteristics are similar to their own. This tendency is stronger in large groups. We also show that behaviors vary within and between macro-groups in the way predicted by endogenous association.
Notes: "April 2007"

Includes bibliographical references (p. 31-36).

Also available in PDF from the NBER world wide web site (www.nber.org).