Networks, markets, and inequality
Published version
Peer-reviewed
Repository URI
Repository DOI
Change log
Authors
Gagnon, J
Goyal, Sanjeev https://orcid.org/0000-0002-9827-5998
Abstract
jats:p The interaction between community and markets remains a central theme in the social sciences. The empirical evidence is rich: in some instances, markets strengthen social ties, while in others they undermine them. The impact of markets on inequality and welfare also varies widely. This paper develops a model where individuals in a social network choose whether to participate in their network and whether to participate in the market. We show that individual behavior is defined by the q-core of the network and the key to understanding the conflicting evidence is whether the market and the network are complements or substitutes. (JEL D63, D85, J15, L82, O15, Z13, Z31) </jats:p>
Description
Keywords
networks, substitutes and complements, welfare, inequality
Journal Title
American Economic Review
Conference Name
Journal ISSN
0002-8282
1944-7981
1944-7981
Volume Title
107
Publisher
American Economic Association
Publisher DOI
Sponsorship
Julien Gagnon thanks the Gates Cambridge Trust for financial support. Sanjeev Goyal is grateful to the Keynes Fellowship and the Cambridge-INET Institute for financial support.