A fundamental question in social sciences is how trust emerges. We provide an answer which relies on the formation of social and economic relationships. We argue that behind trust lies the fact that individuals invest in connections taking into account the potential externalities networks...

I examine a search model a la' Burdett and Judd (1983). Consumers are embedded in a consumers network, they may costly search for price quotations and the information gathered are non-excludable along direct links. This allows me to explore the effect of endogenous consumers externalities on...

We analyze the impact of adolescents' friendship relations in their final-year class of highschool on subsequent labor market success. Based on a typology of network positions we locateeach student within the social system of the school class as either: an isolate, a sycophant,a broker or a...

The business model of companies such as Facebook, MySpace, and Twitter, relies on mon- etizing the information on the interactions and in uences of their users. How valuable is such information, and is its use benecial or detrimental for consumer welfare? We study these questions in a model...

Empirical work shows that a large majority of individuals get most of their information from a very small subset of the group, viz., the influencers; moreover, there exist only minor differences between the observable characteristics of the influencers and the others. We refer to these empirical...

What makes you popular at school? What are the labor market returns to popularity? We investigate these questions using an objective measure of popularity derived from sociometric theory: the number of friendship nominations received from schoolmates, interpreted as a measure of early...

We study a model of multi-player communication. Privately informed decision makers have different preferences about the actions they take, and communicate to influence each othersʼ actions in their favor. We prove that the equilibrium capability of any player to send a truthful message to a set...

We examine the allocation of scarce attention in team production. Each team member is in charge of a specialized task, which must be adapted to a privately observed shock and coordinated with other tasks. Coordination requires that agents pay attention to each other, but attention is in limited...

We develop a model where workers, anticipating the risk of becoming unemployed, invest in connections in order to access information about available jobs that other workers may have. The investment in connections is high when the job separation rate in the labor market is moderate, whereas it is...