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American Economic Review: Vol. 102 No. 5 (August 2012)

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Social Capital and Social Quilts: Network Patterns of Favor Exchange

Article Citation

Jackson, Matthew O., Tomas Rodriguez-Barraquer, and Xu Tan. 2012. "Social Capital and Social Quilts: Network Patterns of Favor Exchange." American Economic Review, 102(5): 1857-97.

DOI: 10.1257/aer.102.5.1857

Abstract

We examine the informal exchange of favors in societies such that any two individuals interact too infrequently to sustain exchange, but such that the social pressure of the possible loss of multiple relationships can sustain exchange. Patterns of exchange that are locally enforceable and renegotiation-proof necessitate that all links are "supported": any two individuals exchanging favors have a common friend. In symmetric settings, such robust networks are "social quilts": tree-like unions of completely connected subnetworks. Examining favor exchange networks in 75 villages in rural India, we find high levels of support and identify characteristics that correlate with support. (JEL D85, O12, O18, Z13)

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Authors

Jackson, Matthew O. (Stanford U and Santa Fe Institute)
Rodriguez-Barraquer, Tomas (European U Institute, Florence)
Tan, Xu (Stanford U)

JEL Classifications

D85: Network Formation and Analysis: Theory
O12: Microeconomic Analyses of Economic Development
O18: Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
Z13: Economic Sociology; Economic Anthropology; Social and Economic Stratification


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