Outline

• Part 1: Background and Fundamentals

  • Definitions and Characteristics of Networks (1,2)
  • Empirical Background (3)

• Part 2: Network Formation

  • Random Network Models (4,5)
  • Strategic Network Models (6,11)

• Part 3: Networks and Behavior

  • Diffusion and Learning (7,8)
  • Games on Networks (9)

What do We Know?

• Networks play role in many settings

  • Job cnotacts, crime, risk sharing, trade, politics,...

• Network position and structure matters

  • rich sociology literature
  • Medicis not the wealthiest nor the strongest politically, but the most central

• "Social" Network have special characteristics

  • small worlds, degree distributions...

Embeddedness of Economic Activity

• Few markets are centralized, anonymous

• Specific relationships matter...

Generally there are $n(n-1)/2$ (n choose 2) possible links, and $2^{n(n-1)/2}$ possible networks on n nodes