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The Oxford Handbook of the Economics of Networks represents the
frontier of research into how and why networks form, how they
influence behavior, how they help govern outcomes in an interactive
world, and how they shape collective decision making, opinion
formation, and diffusion dynamics. From a methodological
perspective, the contributors to this volume devote attention to
theory, field experiments, laboratory experiments, and
econometrics. Theoretical work in network formation, games played
on networks, repeated games, and the interaction between linking
and behavior is synthesized. A number of chapters are devoted to
studying social process mediated by networks. Topics here include
opinion formation, diffusion of information and disease, and
learning. There are also chapters devoted to financial contagion
and systemic risk, motivated in part by the recent financial
crises. Another section discusses communities, with applications
including social trust, favor exchange, and social collateral; the
importance of communities for migration patterns; and the role that
networks and communities play in the labor market. A prominent role
of networks, from an economic perspective, is that they mediate
trade. Several chapters cover bilateral trade in networks,
strategic intermediation, and the role of networks in international
trade. Contributions discuss as well the role of networks for
organizations. On the one hand, one chapter discusses the role of
networks for the performance of organizations, while two other
chapters discuss managing networks of consumers and pricing in the
presence of network-based spillovers. Finally, the authors discuss
the internet as a network with attention to the issue of net
neutrality.
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