Papers by Matthew O. Jackson
SSRN Electronic Journal, 2015
We survey the literature on the economic consequences of the structure of social networks. We dev... more We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of 'macro' and 'micro' characteristics of social interaction networks and discuss both the theoretical and empirical findings concerning the role of those characteristics in determining learning, diffusion, decisions, and resulting behaviors. We also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors.
Soc Choice Welfare, 1992
ABSTRACT
ABSTRACT We analyze friendship formation patterns and develop a dynamic model of friendship forma... more ABSTRACT We analyze friendship formation patterns and develop a dynamic model of friendship formation that combines choices with random meeting patterns. We estimate biases in agents' preferences over the races of their friends and biases in the rates at which agents of various races meet each other. We find that both biases are significant in the data and that the biases differ significantly across races.
We analyze competitive pressures in a sequence of auctions with a growing number of bidders, in a... more We analyze competitive pressures in a sequence of auctions with a growing number of bidders, in a model that includes private and common valuations as special cases. We show that the key determinant of bidders' surplus (and implicitly auction revenue) is how the goods are distributed. In any setting and sequence of auctions where the allocation of good(s) is concentrated among a shrinking proportion of the population, the winning bidders enjoy no surplus in the limit. If instead the good(s) are allocated in a dispersed manner so that a non-vanishing proportion of the bidders obtain objects, then in any of a wide class of auctions bidders enjoy a surplus that is bounded away from zero. Moreover, under dispersed allocations, the format of the auction matters. If bidders have constant marginal utilities for objects up to some limit, then uniform price auctions lead to higher revenue than discriminatory auctions. If agents have decreasing marginal utilities for objects, then uniform price auctions are asymptotically efficient, while discriminatory auctions are asymptotically inefficient. Finally, we show that in some cases where dispersed allocations are efficient, revenue may increase by bundling goods at the expense of efficiency.
For groups that must make several decisions of similar form, we define a simple and general mecha... more For groups that must make several decisions of similar form, we define a simple and general mechanism that is designed to promote social efficiency. The mechanism links the various decisions by forcing agents to budget their representations of preferences so that the frequency of ...
We consider discontinuous games with incomplete information. Auctions are a leading example. With... more We consider discontinuous games with incomplete information. Auctions are a leading example. With standard tie breaking rules (or more generally, sharing rules), these games may not have equilibria. We consider sharing rules that depend on the private information of players. We show that there exists an equilibrium of an augmented game with an incentive compatible sharing rule in which players
We examine how three different communication processes operating through social networks are affe... more We examine how three different communication processes operating through social networks are affected by homophily -- the tendency of individuals to associate with others similar to themselves. Homophily has no effect if messages are broadcast or sent via shortest paths; only connection density matters. In contrast, homophily substantially slows learning based on repeated averaging of neighbors' information and Markovian diffusion processes such as the Google random surfer model. Indeed, the latter processes are strongly affected by homophily but completely independent of connection density, provided this density exceeds a low threshold. We obtain these results by establishing new results on the spectra of large random graphs and relating the spectra to homophily. We conclude by checking the theoretical predictions using observed high school friendship networks from the Adolescent Health dataset.
We develop a model where agents obtain information about job opportunities through an explicitly ... more We develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts. We show that an improvement in the employment status of either an agent's direct or indirect contacts leads to an increase in the agent's employment probability and expected wages, in the sense of first order stochastic dominance. A similar effect results
Homophily[1], the tendency of people to associate with others similar to themselves, is observed ... more Homophily[1], the tendency of people to associate with others similar to themselves, is observed in many social networks, ranging from friendships to marriages to business relationships, and based on a variety of characteristics, including race, age, gender, religion, and education.[2, 3] We present a technique for distinguishing two primary sources of homophily: biases in the preferences of individuals over the types of their friends and biases in the chances that people meet individuals of other types. We use this technique to analyze racial patterns in friendship networks in a set of American High Schools. Biases in preferences and biases in meeting rates are both highly significant in these data, and both types of biases differ significantly across races. Asians and Blacks are biased towards interacting with their own race at rates more than seven times higher than Whites, while Hispanics exhibit an intermediate bias in meeting opportunities. Asians exhibit the least preference bias, valuing friendships with other types 90 percent as much as friendships with Asians, while Blacks and Hispanics value friendships with other types 55 and 65 percent as much as same-type friendships, respectively, and Whites fall in between, valuing other-type friendships 75 percent as much as friendships with Whites. Meetings are significantly more biased in large schools (with more than 1000 students) than in small schools (with fewer than 1000 students), while biases in preferences exhibit some significant variation with the median household income levels in the counties surrounding the schools.
We develop and implement a collocation method to solve for an equilibrium in the dynamic legislat... more We develop and implement a collocation method to solve for an equilibrium in the dynamic legislative bargaining game of Duggan and Kalandrakis (2008). We formulate the collocation equations in a quasi-discrete version of the model, and we show that the collocation equations are locally Lipchitz continuous and directionally differentiable. In numerical experiments, we successfully implement a globally convergent variant of Broyden's method on a preconditioned version of the collocation equations, and the method economizes on computation cost by more than 50% compared to the value iteration method. We rely on a continuity property of the equilibrium set to obtain increasingly precise approximations of solutions to the continuum model. We showcase these techniques with an illustration of the dynamic core convergence theorem of Duggan and Kalandrakis (2008) in a nine-player, two-dimensional model with negative quadratic preferences.
We provide an overview and synthesis of the literatures analyzing games where players are connect... more We provide an overview and synthesis of the literatures analyzing games where players are connected via a network structure. We study, in particular, the impact of the structure of the network on individuals' behaviors. We focus on the game theoretic modeling, but also include some discussion of analyses of peer effects, as well as applications to diffusion, employment, crime, industrial organization, and education.
Proceedings of the National Academy of Sciences of the United States of America, Jan 22, 2014
We examine different populations' play in coordination games in online experiments with over ... more We examine different populations' play in coordination games in online experiments with over 1,000 study participants. Study participants played a two-player coordination game that had multiple equilibria: two equilibria with highly asymmetric payoffs and another equilibrium with symmetric payoffs but a slightly lower total payoff. Study participants were predominantly from India and the United States. Study participants residing in India played the strategies leading to asymmetric payoffs significantly more frequently than study participants residing in the United States who showed a greater play of the strategy leading to the symmetric payoffs. In addition, when prompted to play asymmetrically, the population from India responded even more significantly than those from the United States. Overall, study participants' predictions of how others would play were more accurate when the other player was from their own populations, and they coordinated significantly more frequentl...
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Papers by Matthew O. Jackson