Network effects and social inequality

Paul Dimaggio, Filiz Garip

Research output: Contribution to journalReview articlepeer-review

193 Scopus citations

Abstract

Students of social inequality have noted the presence of mechanisms militating toward cumulative advantage and increasing inequality. Social scientists have established that individuals' choices are influenced by those of their network peers in many social domains. We suggest that the ubiquity of network effects and tendencies toward cumulative advantage are related. Inequality is exacerbated when effects of individual differences are multiplied by social networks: when persons must decide whether to adopt beneficial practices; when network externalities, social learning, or normative pressures influence adoption decisions; and when networks are homophilous with respect to individual characteristics that predict such decisions. We review evidence from literatures on network effects on technology, labor markets, education, demography, and health; identify several mechanisms through which networks may generate higher levels of inequality than one would expect based on differences in initial endowments alone; consider cases in which network effects may ameliorate inequality; and describe research priorities.

Original languageEnglish (US)
Pages (from-to)93-118
Number of pages26
JournalAnnual Review of Sociology
Volume38
DOIs
StatePublished - Aug 2012
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science

Keywords

  • Cumulative advantage
  • Diffusion
  • Externalities
  • Homophily
  • Spillovers
  • Threshold models

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