Conformism and self-selection in social networks

摘要

I present a model of conformism in social networks that incorporates both peer effects and self-selection. I show that conformism has positive social value and that social welfare can be bounded by network polarization and connectivity measures. I apply the model to empirical data on high school students' participation in extracurricular activities. I find that the local effect of conformism (i.e. the endogenous peer effect for a fixed network structure) ranges from 7.5% to 45%, depending on the number of peers that an individual has. Simulations show that the optimal policies of an inequality-averse policymaker change depending on a school's enrollment. Small schools should encourage shy students to interact more with other students, while large schools should focus on promoting role models within the school. (C) 2016 Elsevier B.V. All rights reserved.