A Structural Model of Homophily and Clustering in Social Networks
| Autor: | Angelo Mele |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
TheoryofComputation_MISCELLANEOUS
Statistics and Probability Economics and Econometrics Computer science Posterior probability Strategic Network Formation Machine learning computer.software_genre 01 natural sciences Homophily 010104 statistics & probability Exponential family 0502 economics and business Econometrics 0101 mathematics Cluster analysis Assortative mixing Network model 050205 econometrics Random graph business.industry 05 social sciences Community structure Network formation Artificial intelligence Statistics Probability and Uncertainty business computer Social Sciences (miscellaneous) |
| Zdroj: | Journal of Business & Economic Statistics. 40:1377-1389 |
| ISSN: | 1537-2707 0735-0015 |
| DOI: | 10.1080/07350015.2021.1930013 |
| Popis: | Social networks display homophily and clustering, and are usually sparse. I develop and estimate a structural model of strategic network formation with heterogeneous players and latent community structure, whose equilibrium networks are sparse and exhibit homophily and clustering. Each player belongs to a community unobserved by the econometrician. Players' payoffs vary by community and depend on the composition of direct links and common neighbors, allowing preferences to have a bias for similar people. Players meet sequentially and decide whether to form bilateral links, after receiving a random matching shock. The probability of meeting people in different communities is smaller than the probability of meeting people in the same community, and it decreases with the size of the network. The model converges to an exponential family random graph, with weak dependence among links. As a consequence the equilibrium networks are sparse and the sufficient statistics of the network are asymptotically normal. The posterior distribution of structural parameters and unobserved heterogeneity is estimated with school friendship network data from Add Health, using a Bayesian exchange algorithm. The estimates detect high levels of racial homophily, and heterogeneity in both costs of links and payoffs from common friends. The posterior predictions show that the model is able to replicate the homophily levels and the aggregate clustering of the observed network, in contrast with standard exponential family network models. |
| Databáze: | OpenAIRE |
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