Andrea Galeotti (Alesina Seminar)
Date and Time
Location
Speaker & Title
Andrea Galeotti (London Business School), "Small-Group Interactions Reduce Homophily by Muting Directed Search"
Abstract
We study how the quasi-random assignment of MBA students to different peer groups shapes their homophily by gender and ethnicity. We show that students form substantially more crosstrait friendships within small groups than in the broader MBA cohort. We then decompose homophily into the contributions of peer-group composition, preferences, and directed search. Directed search, in which students approach peers with particular characteristics, can substantially amplify even weak preferences for same-trait friends. Survey evidence indicates only weak same-trait preferences but strong same-trait bias in approach decisions. Consistent with this pattern, structural estimates imply that directed search accounts for much of overall homophily. This result helps explain why homophily is lower in small groups, where directed search is muted, and suggests that homophily can be reduced through peer-group design.
Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.
All interested faculty and students are invited to attend.