Networks pervade social and economic life, and they play a prominent role in explaining a huge variety of social and economic phenomena. Standard economic theory did not give much credit to the role of networks until the early 1990s, but since then the study of the theory of networks has blossomed. At the heart of this research is the idea that the pattern of connections between individual rational agents shapes their actions and determines their rewards. The importance of connections has in turn motivated the study of the very processes by which networks are formed.

In Connections, Sanjeev Goyal puts contemporary thinking about networks and economic activity into context. He develops a general framework within which this body of research can be located. In the first part of the book he demonstrates that location in a network has significant effects on individual rewards and that, given this, it is natural that individuals will seek to form connections to move the network in their favor. This idea motivates the second part of the book, which develops a general theory of network formation founded on individual incentives. Goyal assesses the robustness of current research findings and identifies the substantive open questions. Written in a style that combines simple examples with formal models and complete mathematical proofs, Connections is a concise and self-contained treatment of the economic theory of networks, one that should become the natural source of reference for graduate students in economics and related disciplines.

-- "Times Higher Education"

Chapter 1: Introduction 1.1 Themes 1.2 Networks in Economics 1.3 The Economic Approach and Other Subjects 1.4 A Note on Style Chapter 2: Networks: Concepts and Empirics 2.1 Introduction 2.2 Concepts 2.3 Properties of Empirical Networks Chapter 3: Games on Networks 3.1 Introduction 3.2 General Model 3.3 Applications 3.4 Discussion of Two Assumptions 3.5 Concluding Remarks 3.6 Appendix Chapter 4: Coordination and Cooperation 4.1 Introduction 4.2 Coordination Games 4.3 Games of Conflict 4.4 Concluding Remarks 4.5 Appendix Chapter 5: Social Learning 5.1 Introduction 5.2 Theoretical Framework 5.3 Learning from Neighbors 5.4 Related Themes 5.5 Concluding Remarks 5.6 Appendix Chapter 6: Social Networks in Labor Markets 6.1 Introduction 6.2 The Social Transmission of Job Information 6.3 Adverse Selection and Referrals 6.4 The Use of Social Networks: Empirical Evidence 6.5 Concluding Remarks 6.6 Appendix Chapter 7: Strategic Network Formation: Concepts 7.1 Introduction 7.2 One-Sided Links 7.3 Two-Sided Links 7.4 Efficiency and Equity 7.5 Concluding Remarks 7.6 Appendix Chapter 8: One-Sided Link Formation 8.1 Introduction 8.2 A Simple Model of Link Formation 8.3 Extensions 8.4 Experiments and Empirical Regularities 8.5 Research in Other Subjects 8.6 Concluding Remarks 8.7 Appendix Chapter 9: Two-Sided Link Formation 9.1 Introduction 9.2 Network Formation: Four Applications 9.3 Stability and Efficiency 9.4 Unequal Degrees and Payoffs 9.5 Concluding Remarks 9.6 Appendix Chapter 10: Research Collaboration among Firms 10.1 Introduction 10.2 Why Extensive and Nonexclusive Links? 10.3 Collaboration among Competing Firms 10.4 Related Themes 10.5 Empirical Patterns 10.6 Concluding Remarks 10.7 Appendix References Index