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Social Clubs and Social Networks

Author

Listed:
  • Chaim Fershtman
  • Dotan Persitz

Abstract

We present a strategic network formation model based on membership in clubs. Individuals choose affiliations. The set of all memberships induces a weighted network where two individuals are directly connected if they share a club. Two individuals may also be indirectly connected using multiple memberships of third parties. Individuals gain from their position in the induced network and pay membership fees. We study the club congestion model where the weight of a link decreases with the size of the smallest shared club. A trade-off emerges between the size of clubs, the depreciation of indirect connections, and the membership fee.

Suggested Citation

  • Chaim Fershtman & Dotan Persitz, 2021. "Social Clubs and Social Networks," American Economic Journal: Microeconomics, American Economic Association, vol. 13(1), pages 224-251, February.
    • Handle: RePEc:aea:aejmic:v:13:y:2021:i:1:p:224-51
    DOI: 10.1257/mic.20180143
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    Citations

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    Cited by:

    1. Kinateder, Markus & Merlino, Luca Paolo, 2023. "Free riding in networks," European Economic Review, Elsevier, vol. 152(C).
    2. Alan Griffith, 2022. "A continuous model of strong and weak ties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(6), pages 1519-1563, December.
    3. Sokolov, Denis, 2022. "Shapley value for TU-games with multiple memberships and externalities," Mathematical Social Sciences, Elsevier, vol. 119(C), pages 76-90.

    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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