Methods of Identification in Social Networks

Social and economic networks are ubiquitous, serving as contexts for job search, technology diffusion, the accumulation of human capital, and even the formulation of norms and values. The systematic empirical study of network formation-the process by which agents form, maintain, and dissolve links-within economics is recent, is associated with extraordinarily challenging modeling and identification issues, and is an area of exciting new developments, with many open questions. This article reviews prominent research on the empirical analysis of network formation, with an emphasis on contributions made by economists.