TY - JOUR
T1 - Homophily in peer groups
AU - Baccara, Mariagiovanna
AU - Yariv, Leeat
PY - 2013
Y1 - 2013
N2 - The focus of this paper is the endogenous formation of peer groups. In our model, agents choose peers before making contributions to public projects, and they differ in how much they value one project relative to another. Thus, the group's preference composition affects the type of contributions made. We characterize stable groups and find that they must be sufficiently homogeneous. We also provide conditions for some heterogeneity to persist as the group size grows large. In an application in which the projects entail information collection and sharing within the group, stability requires more similarity among extremists than among moderate individuals. (JEL D03, D71, D82, D83).
AB - The focus of this paper is the endogenous formation of peer groups. In our model, agents choose peers before making contributions to public projects, and they differ in how much they value one project relative to another. Thus, the group's preference composition affects the type of contributions made. We characterize stable groups and find that they must be sufficiently homogeneous. We also provide conditions for some heterogeneity to persist as the group size grows large. In an application in which the projects entail information collection and sharing within the group, stability requires more similarity among extremists than among moderate individuals. (JEL D03, D71, D82, D83).
UR - https://www.scopus.com/pages/publications/84882583915
U2 - 10.1257/mic.5.3.69
DO - 10.1257/mic.5.3.69
M3 - Article
AN - SCOPUS:84882583915
SN - 1945-7669
VL - 5
SP - 69
EP - 96
JO - American Economic Journal: Microeconomics
JF - American Economic Journal: Microeconomics
IS - 3
ER -