Ethnic Identity and Social Distance in Friendship Formation

53 Pages Posted: 11 Jan 2010

See all articles by Joan de Martí

Joan de Martí

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Yves Zenou

Stockholm University; Monash University - Department of Economics; Research Institute of Industrial Economics (IUI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Date Written: November 2009

Abstract

We analyze a model of network formation with agents that belong to different communities and an endogenous cost structure. Both individual benefits and costs depend on direct as well as indirect connections. Benefits of an indirect connection decrease with distance in the network, while the cost of a link depends on the type of agents involved in it as well as the rest of linkage decisions of both of them. Two individuals from the same community always face a low linking cost. The cost of forming a relationship for two individuals belonging to different communities diminishes with the rate of exposure of each of them to the other community. As a result, our model introduces endogenous social distances that rely on individual positions in the network. We derive a number of results with regard to equilibrium networks: (i) socialization among the same type of agents might be weak even if the within-type link cost is very low; (ii) oppositional identity patterns can arise for a wide range of parameters; (iii) integrated networks can be socially preferable to segregated networks.

Keywords: bridges, ethnic minorities, identity, Network formation, social norms, structural holes

JEL Classification: A14, D85, J15

Suggested Citation

de Martí, Joan and Zenou, Yves and Zenou, Yves, Ethnic Identity and Social Distance in Friendship Formation (November 2009). CEPR Discussion Paper No. DP7566, Available at SSRN: https://ssrn.com/abstract=1533171

Joan De Martí (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Yves Zenou

Monash University - Department of Economics ( email )

Australia

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Research Institute of Industrial Economics (IUI) ( email )

P.O. Box 5501
S-114 85 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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