It has long been recognized that most economic transactions do not take place on anonymous markets but rather they are bilateral transactions among two parties that need to know each other and to meet in order for the exchange to take place.
Hence, one's network of social interactions is important in shaping own economic outcomes. This is the case for example on the labor market: many studies showed how relevant one's social ties are in determining wages and employment opportunities.
In my future research I intend to continue my work on the understanding of the interplay between social interactions and economic activities, from two complementary perspectives.
First, I will empirically study the effect of social interactions on economic outcomes in two applications, that is, the marriage market and the labor market. In many situations and countries, people have a negative attitudes towards the members of a certain group because of statistical discrimination or preferences. Stereotyping have implications in many markets, such as the marriage market and the labor market. In my research, I will test the so-called contact hypothesis: social interactions with member of the discriminated group might affects one's expectations regarding their behavior or characteristics, and in turn reduce statistical or taste discrimination.
Regarding the marriage market, I will analyze whether the racial composition of school students' cohorts impacts romantic relationships later in life. In the case of the labor market, I will focus on gender differences in the allocation of workers to firms.
Second, I will study the implications of the fact that, once agents realize that their social ties can affect their economic outcomes, they might strategically invest in social interactions. As a result, it is difficult to disentangle the effect of peers on behavior from peer selection. Since, it is not always possible to devise strategies according to which there is an exogenous variations in peers, I will develop models that can inform us on how to disentangle empirically the effects of peer selection and peers effects on behavior.
I will apply these techniques to three applications: the use of referrals in the labor markets, the diffusion of rumors in social networks and taxation in the private provision of public goods.
On the one hand, my domain covers both modern social and economic network theory and the more traditional search and matching literature. On the other hand, it also ranges from theoretical and to applied work: I strongly abide with the view that, while theory is needed to guide empirical analysis, empirical analysis provides a constant source of inspiration and discipline for theoretical developments.
My research will hopefully advance our understanding of economic activity by providing a framework that explicitly takes into account the fact that most economic interactions are influenced by social relationships among people. This will provide us with policy implications to alleviate the inefficiencies and inequalities that emerge in decentralized networked markets.