Ph.d.-forsvar: Andreas Bjerre-Nielsen: "Dynamics of homophily in friendships

This PhD thesis contains three related, but self-contained chapters. An overarching theme is social dynamics and in particular what is known as homophily or sorting, i.e. the tendency for people to make friends with those who are similar to themselves. The methodology includes an empirical evaluation of a new large field study and theoretical modeling.

The first chapter is an investigation of a game theoretical model of partnership formation. The model is built on a setting with a trade-off between the quality of matches and the quantity in number of indirect connections in the social network. It is demonstrated in the chapter that homophily constitutes a game theoretical equilibrium, however, this outcome is inefficient under network effects. This contrasts with conventional economic models of homophily and assortative behavior. The chapter also conveys a new relation between individual characteristics and network position. 

The second chapter proposes a new theory of how homophily affects inequality. The chapter shares similarities with the first chapter, but considers the dynamic consequences of friendships by introducing a novel feature whereby a current partner's productivity affects one's own future productivity. The chapter explores under which circumstances assortative behavior in partnerships emerges and demonstrates conditions for when current sorting increases the future level of inequality. Moreover, the chapter determines when sorting implies increasing inequality within generations over time. 

The third and last chapter examines how friendships form and develop in a field study at Technical University of Denmark (DTU). This project is co-authored with Professor David Dreyer Lassen. The data from the field study is a unique dataset on social interactions spanning multiple dimensions e.g. phone communication and face-to-face meetings. We find evidence of homophily across many dimensions. We furthermore show that homophily is not only a static phenomenon but also operates across time and even among those people who one has common friends with, i.e. friends of friends