FRIENDSHIP NETWORKS*

ABSTRACT This paper develops a model of social networks different from those presented in the recent literature. In contrast to existing models, the level of investment in link formation is a continuous decision variable, and links form stochastically rather than deterministically, with the probability depending on the noncooperative investment choices of both parties. Since the network structure is then stochastic rather than deterministic, the actual pattern of links cannot be specified, as in previous models, with the analysis focusing instead on which links are most likely to form. This alternate approach leads to a much simpler mathematical structure than in previous work. The analysis, which is couched in the context of friendship networks, shows that individual investment in friendship formation is too low. In addition, the analysis shows that, in an asymmetric setting where one individual has personal magnetism or a broad group of acquaintances, friendship links involving this attractive agent are most likely to form.     

Pricing, Capacity Choice, and Financing in Transportation Networks

Abstract.  This paper explores interrelations between pricing, capacity choice, and financing in transportation networks. We build on the Mohring‐Harwitz result on self‐financing of optimally designed and priced roads and investigate it in a network environment under various types of second‐best regulation. A small network model with endogenous car ownership demonstrates that optimal congestion pricing and capacity choice over an entire network may cause user prices to increase more in initially mildly congested areas compared to heavily congested areas. Furthermore, a flat kilometer charge under optimal capacity choice may result in first‐best efficiency gains.     

Imperial Pursuits

Books reviewed:
Amy Kaplan. The Anarchy of Empire in the Making of U.S. Culture. Cambridge, MA: Harvard University Press, 2002. 272 pp. Notes, Index. $37.50 (cloth).     

Hierarchical Integration: The Dollar Economy and the Rupee Economy

While contemporary globalization makes the world more interconnected, it also reworks and builds on existing cleavages and uneven development. This is an under‐researched dimension of the emerging twenty‐first century international division of labour. The core question is whether new developments (associated with exports, offshoring and outsourcing) spin off to the majority in the countryside and the urban poor. This article examines the relationship between the dollar economy and the rupee economy in India. It documents the ways in which inequality is built into and sustains India's development. The authors discuss other instances of multi‐speed economies and analytics that seek to come to grips with these relations, from combined and uneven development to global value chains. They present three ways of capturing contemporary inequality: asymmetric inclusion, enlargement‐and‐containment and hierarchical integration, each of which captures different dimensions of inequality.     

SOCIAL NETWORKS AND THE CONVERGENCE OF POPULATION ATTRIBUTES: A GENERALIZATION

ABSTRACT.  Analysis of social interactions has recently become an important area of economic research, and the focus of researchers in this area has increasingly shifted toward dynamic models. In one recent contribution, Brueckner and Smirnov (2007) analyze the evolution of population attributes in an exceedingly simple model, where an agent's attributes at time t are equal to the average attribute value among his acquaintances. The pattern of acquaintances in the population is determined by the social network, and Brueckner and Smirnov (BS) explore the effect of network characteristics on the convergence of population attributes over time. They show that some simple sufficient conditions on the network structure ensure convergence to a "melting-pot" equilibrium where attributes are uniform across agents. The present paper provides a generalization of BS's analysis, allowing for a more general form of the rule governing the evolution of population attributes. The analysis shows that BS's previous conclusions continue to hold under this generalization, while also providing a result that can be applied more generally to other models.     

A DNA test for sex identification in cattle confirms osteometric results

It is of vital importance to be able to sex identify cattle remains to understand the strategies and importance of cattle husbandry in an ancient society. This is usually done from osteoarchaeological assemblages and often relies on measurements of metapodials. The breadth measurement of the distal trochlea is considered an easy way to identify the sex. Bones from males appears to be easily distinguishable from female counterparts, although it has been complicated to find an external control for the morphological results. Here we investigate the reliability of these particular morphometrics for sex identifying cattle bones with molecular genetics. We use a sex discriminating single nucleotide polymorphism in the ZFXY gene and we apply it to DNA from the bones. To keep the fragment size short and suitable for ancient DNA we base the test on a SNP. The test confirms the osteological sex identification in all cases were DNA could be retrieved. This molecular method can also be used when no fragments suitable for osteological sex identification can be found or when the measurements are non-conclusive.     

The Effect of Social Networks on Resource Access and Business Start-ups

In previous research, entrepreneurs' social networks are expected to influence entrepreneurial success because they give access to resources. This is confirmed in this study. In most research it is also believed that network features such as strength of ties determine to a great extent what kind of resources the entrepreneur receives. Although this last assumption has important implications for entrepreneurship research and for practice, the validity of the assumption has not been put to the test in previous research. The analysis of data from an empirical study of entrepreneurs in Norway gives at best partial support for the assumption. Contrary to what should be expected, the results indicate that strong ties are important channels for information and that weak ties give access to finance.