We introduce a model of homophily that does not rely on the assumption of homophilous preferences. Rather, it builds on the dual process account of Theory of Mind in psychology which focuses on the role of introspection in decision making. Homophily emerges because players find it easier to put...

Networks can have an important effect on economic outcomes. Given the complexity of many of these networks, agents will generally not know their structure. We study the sensitivity of game-theoretic predictions to the specification of players' (common) prior on the network in a setting where...

This paper explores the manner in which the structure of a social network constrains the level of inequality that can be sustained among its members. We assume that any distribution of value across the network must be stable with respect to coalitional deviations, and that players can form a...