Starting from the academic year 2021-22, the course of Economics of Networks has been deactivated.
Professor Fabio Sabatini
Office: 6th floor, room 637
Email: fabio.sabatini@uniroma1.it
Lecture notes, research papers, and textbook extracts will be provided as the course progresses.
All references (except textbooks) can be downloaded free of charge from this page.
Wednesday (9-11), Thursday (11-13) and Friday (9-11), Room 1D, 6th floor, Department of Economics and Law, starting from Wednesday February 24, 2021.
Students are required to enroll in the course via Moodle and Classroom. On Moodle, just look for "Economics and Policy of Networks" on the platform. The password is EPN_Sapienza. Only Sapienza and Erasmus students having an institutional email address @studenti.uniroma1.it can access the teaching materials.
On Classroom, you can find the course code via the code hq5k73x or clicking on this link.
An updated version of the lecture notes will be made avaialble on Moodle the day before each lecture.
Any day by appointment exclusively via Zoom.
Exams' dates are reported on Infostud.
I will share the teaching materials (i.e., the Pdf files of the slides, papers, and other readings) and audio (or video) lectures on Moodle every week.
Students who do not have an institutional email address @studenti.uniroma1.it (e.g. Erasmus students) can contact our webmaster (sergio.pellacani@uniroma1.it) to get one.
Exams will take place online via Google Meet until the end of 2021. They will consist of an interview about the program's course. The link for the Meet conference will be published on this site with a 24h advance.
Although there are no formal prerequisites for attending the course, basic competences in essential Statistics for Economics and Econometrics are highly appreciated. Students needing review are encouraged to attend office hours. Schedule conflicts can be easily resolved by appointments.
Networks pervade our social and economic lives. They play a central role in the transmission of information about job opportunities and are critical to the trade of many goods and services. They are important in determining how diseases spread, which languages we speak, how we vote, as well as whether or not we decide to become criminals, how much education we obtain, which products we buy, and our likelihood of succeeding professionally.
The countless ways in which network structures affect well-being make it critical to understand how they impact our behavior, which network structures are likely to emerge in a society, and why we organize ourselves as we do.
This course provides an overview and synthesis of research on social and economic networks, drawing on studies by economists, sociologists, psychologists, computer scientists, and mathematicians.
Lectures will also deal with the informal institutions stemming from networks that shape the economic activity: social norms, social structures, social pressures, shared beliefs, culture, etc.
We will consider how economic policy can influence such informal institutions to nudge individuals and networks to the purpose of increasing social welfare.
After a brief introduction to some basic concepts, lectures will be devoted to the presentation of a few seminal studies in the field and of a series of more recent original research papers.
During the course, students will give presentations of a selection of published papers.
In addition, small groups of students will be assigned a topic with the purpose of developing an original paper consisting in a review of the literature and/or in a an empirical analysis based on survey data.
Several lectures will consist entirely of student presentations. One goal of the course is to identify new research questions, which students will be invited to develop empirically and/or theoretically with the professor’s assistance.
At the end of each lecture, students will be invited to devote 10 minutes to write the highlights of the lecture. Highlights will consist of 1 to 5 bullet points (max 85 characters each). Highlights will be subject to evaluation (consultation of teaching materials will be allowed).
Students will be invited to undertake one or more of the following assignments:
- Presentation of a paper to be picked up in a reading list provided during the course. Students can suggest alternative papers for the presentation. The paper must be a relevant academic work in the field of economics. Papers can be searched by following these guidelines.
- Development and presentation of an original paper on an assigned topic. Please follow the link to see examples of suggested topics.
Such a paper could consist, for example, in a simple empirical analysis on a dataset provided by the teacher and/or in a review of the existing economics literature on the topic. Relevant academic papers on the topic can be searched and selected by following these instructions.
A) Only for students attending the lectures
Students attending the lectures earn points for each assignment. The total number of points accumulated will determine the final evaluation.
Points will be assigned as follows:
- Paper presentation (to be picked among a reading list): up to 15 points
- Development and presentation of an original paper: up to 20 points (plagiarism will be detected and sanctioned)
- Final written exam: up to 15 points (consultation of teaching materials is not allowed)
Points will not be weighted and will equally contribute to the final grade. By reaching the 35 points threshold students will earn the distinction (i.e. 30 cum laude).
B) For non-attending students
Students who are not attending the lectures will have to give just one final written exam at the end of the course (exam dates for the whole academic year are available on Infostud). The bibliographic references for such exam are the lecture notes posted in this website.
Perfect written exams receive the final distinction (laude): there is no discrimination between attending and non-attending students.
Examples of possible exam questions: https://goo.gl/F3pXZc
(valid for both the A and the B types of student)
There are NO mid-term exams for attending students only (so-called esoneri) during the course.
By the end of this course, students should have: 1) Knowledge and understanding of the current economic research on social and economic networks, with a specific focus on the role of networks in the economic activity – e.g. in the formation and development of entrepreneurial activities, consumption patterns, and social norms. 2) The ability to read research papers in this field. 3) The ability to present and critically discuss research papers in this field. 4) Sufficient understanding of open issues to formulate a new research question in this field.
By the end of the course, students should have: 1) the ability to conduct bibliographic researches on specific topics in economics and other social sciences. 2) The ability to understand and critically review research papers in the field of networks from different disciplines (economics, but also sociology, computer science, and mathematics). 4) The ability to assess the strengths and weaknesses of an academic paper in the field. 3) The ability to present and discuss research papers. 4) The ability to formulate and develop a new research question in the field.
This course targets students that are interested in the academic literature in the field of networks, either because they plan to apply for a PhD in economics or other social sciences or because they would like to be able to understand with a critical view the articles and papers available in their area of specialization instead of simply reading journalistic summaries of scientific reports.
1. Introduction to the course and exam's rules (updated February 24, 2020)
2. Introduction to networks (updated March 1, 2019)
3. Networks and social capital (updated March 6, 2019)
4. Networks and human capital (updated March 7, 2019)
5. The economic outcomes of networks and norms (updated March 14, 2019)
6. The long term persistence of networks (updated March 14, 2018)
7. Methodological issues regarding the identification of networks' economic outcomes (updated May 10, 2019).
8. Networks and economic growth: seminal studies (updated May 10, 2019)
9. Networks and economic growth: recent studies and the frontier of research (updated May 10, 2019)
10. Networks, culture, trade and entrepreneurship (updated May 10, 2019)
11. Networks, culture and redistribution (updated May 10, 2019)
12. Fairness and demand for redistribution (updated May 10, 2019)
13. Networks and the labour market
14. Online networks and trust (updated May 11, 2018)
15. Networks, the economic activity and the dynamics of viral diseases (updated March 11, 2020)
16. The Covid-19 outbreak. Hints for an economic analysis (updated March 15, 2020)
Guide to bibliographic searches for the students of Economics & Policy of Networks (updated March 15, 2018)
List of suggested readings for the in-class presentation (updated March 21, 2019)
List of Covid-19 Economics Papers (updated April 26, 2020).
List of suggested topics for the elaboration of an original paper
How to write a research paper, by Sami Solanki (Max Planck Institute for Solar System Research)
Main references:
• Jackson, M. O., Rogers, B., Zenou, Y. (2016). Networks: an economic perspective. In R. Light and J. Moody (Eds.). The Oxford Handbook of Social Network Analysis. Oxford: Oxford University Press. Free download here: https://goo.gl/1c1LV4.
• Jackson, M.O., Rogers, B.W. and Y. Zenou (2017). The economic consequences of social network structure. Journal of Economic Literature 55(1): 1-47. Free download here: https://goo.gl/Lt0hiF.
Pierre Bourdieu: the critique to mainstream economics and a theory of social networks as social capital.
Main references
• Bourdieu, P. (1986). The forms of capital. In: Richardson, J. (Ed.), Handbook of Theory and Research for the Sociology of Education. Westport, CT: Greenwood: 241–58. Free download here: https://goo.gl/IHY7uD.
• Christoforou, A., Lainé, M. (Eds.) (2014). Re-Thinking Economics: Exploring the Work of Pierre Bourdieu. London and New York: Routledge. Available in the Department’s library.
Gary Becker: the approach of neoclassical economics and a theory of social networks as human capital.
James Coleman: the approach of rational choice sociology to social networks.
Main references
• Becker, G. (1974). A theory of social interactions. Journal of Political Economy 82(6), 1063-1093. Free download here: https://goo.gl/3EesDg.
• Christoforou, A. (2013). On the identity of social capital and the social capital of identity. Cambridge Journal of Economics 37, 719–736. Free download here: https://goo.gl/V8ZriW.
• Coleman, J. S. (1988). Social Capital in the Creation of Human Capital. The American Journal of Sociology 94, S95-S120. Free download here: https://goo.gl/Fecje6.
• Fine, B. (2001). Social Capital versus Social Theory. London and New York: Routledge. Available in the Department’s library (a Pdf copy for personal use can be provided by the professor by request).
Robert Putnam and the “Italian job”. The study of networks enters the realm of economics. An introduction to the problems of defining and measuring networks (and some related concepts) in empirical studies.
Main references
• Putnam, R. D., Leonardi, R., Nanetti, R. Y. (1993). Making Democracy Work: Civic Traditions in Modern Italy. Princeton: Princeton University Press. Available in the Department’s library (a Pdf copy for personal use can be provided by the professor by request).
• Putnam, R. D. (2000). Bowling Alone: The Collapse and Revival of the American Community. New York: Simon & Schuster. Available in the Department’s library (a Pdf copy for personal use can be provided by the professor by request).
The limitations of Putnam’s work. The issue of identifying networks’ effects on economic outcomes. Introduction to instrumental variables and natural experiments.
Main references
• Guiso, L., Sapienza, P., Zingales, L. (2010). Civic capital as the missing link. NBER Working paper 15845. Free download here: https://goo.gl/lMHt8s.
• Guiso, L., Sapienza, P., Zingales, L. (2016). Long term persistence. Journal of the European Economic Association 14(6): 1401–1436. Free download here: https://goo.gl/x6ChvB.
• Nunn N, Wantchekon L. (2011). The Slave Trade and the Origins of Mistrust in Africa. American Economic Review 101 (7): 3221-3252. Free download here: https://goo.gl/CWXcwz.
• Putnam, R. D., Leonardi, R., Nanetti, R. Y. (1993). Making Democracy Work: Civic Traditions in Modern Italy. Princeton: Princeton University Press. Available in the Department’s library (a Pdf copy for personal use can be provided by the professor by request).
• Tabellini, G. (2010). Culture and institutions: Economic Development in the Regions of Europe. Journal of the European Economic Association 8(4), 677–716. Free download here: https://goo.gl/d0Y1tR.
Econometric suggestions (not part of the course’s bibliography).
• Angrist, J. D., Pischke, J. S. (2008). Mostly Harmless Econometrics: An Empiricist’s Companion.
Chapter 4: 83-164.
• Greene, W. H. (2003). Econometric Analysis. Upper Saddle River: Prentice Hall.
Chapter 5: 65-90.
• Stock, J. H., Watson, M. W. (2011). Introduction to Econometrics. Boston: Pearson.
Chapter 10: 331-366.
• Wooldridge, J. M. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press.
Chapter 8: 183-205.
Presentation of two seminal studies assessing the relationship between networks – and some related phenomena, such as trust – and growth.
Main references
• Helliwell, J., Putnam, R. D. (1995). Economic growth and social capital in Italy. Eastern Economic Journal 21(3): 295-307. Free download here: https://goo.gl/P0x5Fu.
• Knack, P., Keefer, P. (1997). Does social capital have an economic payoff? Quarterly Journal of Economics 112 (4): 1251-1288. Free download here: https://goo.gl/zz6sSV.
Presentation of the current frontier of the empirical research on networks and growth.
Main references
• Acemoglu, D., Johnson, S., Robinson, J. A. (2001). The colonial origins of comparative development: an empirical investigation. American Economic Review 91: 1369-1401. Free download here: https://goo.gl/5R8RVj.
• Algann, Y., Cahuc, P. (2010). Inherited Trust and Growth. American Economic Review 100(5): 2060–92. Free download here: https://goo.gl/EV7o0B.
• Algan, Y., Cahuc, P. (2014). Trust, Growth and Well-being: New Evidence and Policy Implications. IZA Discussion Paper No. 7464. Free download here: https://goo.gl/pXTpXy.
• Akçomak, S., ter Weel, B. (2009). Social capital, innovation and growth: Evidence from Europe. European Economic Review, 53 (5), 544-567. Free download here: https://goo.gl/kMHk0A.
• Berggren, N., Elinder, T. (2012). Is tolerance good or bad for growth? Publich Choice 150(1): 283-308. Free download here: https://goo.gl/s52X9D.
• Beugelsdijk, S., Van Schaik, T. (2005). Social capital and growth in European regions: an empirical test. European Journal of Political Economy 21 (2), 301-324. Free download here: https://goo.gl/WpKsO3.
• Guiso, L., Sapienza, P., Zingales, L. (2016). Long term persistence. Journal of the European Economic Association 14-6, 1401–1436. Free download here: https://goo.gl/MT2UjG.
How networks work at the micro level. Presentation of empirical studies on their effects on entrepreneurship and organization.
Main references
• Guiso, L., Sapienza, P-, Zingales, L. (2006). Does Culture Affect Economic Outcomes? Journal of Economic Perspectives 20(2): 23-48. Free download here: https://goo.gl/6MxYUn.
• Guiso, L. Sapienza, P., Zingales, L. (2009). Cultural biases in Economic Exchange? Quarterly Journal of Economics 124 (3): 1095-1131. Free download here: https://goo.gl/WKDurW.
• Guiso, L., Sapienza, P., Zingales, L. (2015). The value of corporate culture. Journal of Financial Economics 117(1): 60-76. Free download here: https://goo.gl/IcB8Oq.
The effect of social networks on labour market regulation and employment.
Main references
• Alesina, A., Giuliano, P. (2014). Family ties. In S. Durlauf and P. Aghion (Eds). Handbook of Economic Growth. Amsterdam: Elsevier. Free download here: https://goo.gl/FMvCxL.
• Alesina, A., Algan, Y., Cahuc, P., Giuliano, P. (2015). Family values and the regulation of labor. Journal of the European Economic Association 13(4), 599-630. Free download here: https://goo.gl/U1sAEi.
• Bauernschuster, S., Falck, O., Heblich, S. (2010). Social capital access and entrepreneurship. Journal of Economic Behavior & Organization 76(3): 821–833. Free download here:
• Bowles, S., Carpenter, J., Gintis, H., Sung-Ha, H. (2009). Strong Reciprocity and Team Production: Theory and Evidence. Journal of Economic Behavior & Organization 71(2): 221-232. Free download here: https://goo.gl/IB1Un0.
• Calvo-Armengol, A., Jackson, M. O. (2004). The Effects of Social Networks on Employment and Inequality. American Economic Review 94(3): 426-454. Free download here: https://goo.gl/Yn6CeH.
• Cingano, F., Rosolia, A. (2012). People I Know: Job Search and Social Networks. Journal of Labor Economics 30(2): 291-332. Free download here: https://goo.gl/cu9IPt.
• Kunze, L., Suppa, N. (2017). Bowling alone or bowling at all? The effect of unemployment on social participation. Journal of Economic Behavior & Organization 133: 213–235. Free download here: https://goo.gl/0OkYle.
How networks and culture shape citizens’ support for income redistribution and the welfare state. Theory and evidence.
Main references
• Alesina, A., Angeletos, G. M. (2005). Fairness and redistribution. American Economic Review 95(4): 960-980. Free download here: https://goo.gl/Df7OSF.
• Algan, Y., Cahuc, P., Sangnier, M. (2016). Trust and the Welfare State: The Twin Peaks Curve. The Economic Journal, 126(593): 861-883. Free download here: https://goo.gl/nIj4Cf.
• Benabou, R., Ok, E. A. (2001). Social mobility and the demand for redistribution. Quarterly Journal of Economics 116 (2): 447-487. Free download here: https://goo.gl/smphUr.
• Cerqueti, R., Sabatini, F., Ventura, M. (2016). Civic capital and support for the welfare state. Free download here: https://goo.gl/C3BRzj.
• Sabatini, F., Ventura, M., Yamamura, E., Zamparelli, L. (2017). Civic capital and redistribution. Sapienza University of Rome, mimeo.
• Yamamura, E. (2012). Social capital, household income, and preferences for income redistribution. European Journal of Political Economy, 28(4), 498-511. Free download here: https://goo.gl/TuV1QB.
The empirical studies assessing the role of networks and culture in individual health
Main references
• Costa, D. L., Kahn, M. (2007). Surviving Andersonville: The Benefits of Social Networks in POW Camps. American Economic Review 97(4): 1467-1489. Free download here: https://goo.gl/lxpjFk.
• Costa, D., L. Kahn, M., Roudiez, C., Wilson, S. (2016). Persistent Social Networks: Civil War Veterans who Fought Together Co-Locate in Later Life. NBER Working Paper No. 22397. Free download here: https://goo.gl/PWxkwF.
• D’Hombres R., Rocco L., Shurcke M., Mckee M., (2010). Does social capital determine health? Evidence from eight transition countries. Health Economics 19, 56-74. Free download here: https://goo.gl/Y32m8U.
• Fumagalli, E., Rocco, L., Shurcke M. (2014). From Social Capital to Health - and Back. Health Economics 23(5): 586–605. Free download here: https://goo.gl/24eXfX.
The empirical studies assessing the role of networks in subjective well-being.
Main references
• Bartolini, S. and Sarracino, F. (2015). The dark side of Chinese growth: declining social capital and well-being in times of economic boom. World Development 74: 333-351. Free download here: https://goo.gl/o0DMuw.
• Bruni, L., Stanca, L. (2008). Watching alone: Relational goods, television and happiness. Journal of Economic Behavior and Organization 65 (3-4), 506-528. Free download here: https://goo.gl/YqCjx3.
• Diener, E., Heliwell, J. F., Kanheman, D. (2010). International Differences in Well-Being. New York: Oxford University Press. (a Pdf copy for personal use can be provided by the professor by request).
The role of the Internet and online social networks in political participation and voting behavior.
Main references
• Campante, F. R., Durante, R., and Sobbrio, F. (2013). Politics 2.0: The multifaceted effect of broadband Internet on political participation. NBER Working Paper w19029. Free download here: https://goo.gl/PM8xMr.
• Czernich, N. (2012). Broadband Internet and political participation: Evidence for Germany. Kyklos, 65(1): 35–52. Free download here: https://goo.gl/CjZJ7g.
• Falck, O., Gold, R., and Heblich, S. (2014). E-lections: Voting behavior and the Internet. American Economic Review 104 (7): 2238-2265. Free download here: https://goo.gl/fYF4GN.
How online networks can destroy and create trust: empirical and experimental studies.
Main references
• Antoci, A., Delfino, A., Paglieri, F., Panebianco, F., Sabatini, F. (2016). Civility vs. Incivility in Online Social Interactions: An Evolutionary Approach. PLoS ONE 11(11): e0164286. Free download here: https://goo.gl/197mY9.
• Sabatini, F., Antoci, A., Paglieri, F., Reggiani, T., Bonelli, L. (2015). The effects of online interaction on trust. An experimental study with Facebook primes. Proceedings of the Conference “Language, Cognition, Society”, Genova, Italy, December 10, 2015.
• Sabatini, F., Sarracino, F. (2015). Online social networks and trust. MPRA Paper 62506.
• Valenzuela, S., Park, N., Kee, K. F. (2009). Is There Social Capital in a Social Network Site?: Facebook Use and College Students' Life Satisfaction, Trust, and Participation. Journal of Computer-Mediated Communication 4 (4): 875-901. Free download here: https://goo.gl/iYKomA.
Theoretical and empirical studies on the role of online networks in social participation and social isolation.
• Antoci, A., Sabatini, F., Sodini, M. (2012). The Solaria Syndrome: Social Capital in a Hypertechnological Growing Economy. Journal of Economic Behavior and Organization 81 (3), 802-814. Free download here: https://goo.gl/sToluM.
• Antoci, A., Sabatini, F., Sodini, M. (2015). Online and offline social participation and social povert traps. Journal of Mathematical Sociology 39 (4), 229-256. Free download here: https://goo.gl/E2M2Jp.
• Bauernschuster, S., Falck, O., Wößmann, L. (2014), Surfing Alone? The Internet and Social Capital: Quasi-Experimental Evidence from an Unforeseeable Technological Mistake. Journal of Public Economics 117, 73-89. Free download here: https://goo.gl/fPA9z0.
• Sabatini, F., Sarracino, F. (2014). E-participation: Social Capital and the Internet. FEEM Working Paper 2014.081. Free download here: https://goo.gl/ztEwqe.
Empirical studies investigating how online networks can boost social comparisons causing dissatisfaction with income in their members.
Main references
• Lohmann, S. (2015). Information technologies and subjective well-being: does the Internet raise material aspirations? Oxford Economic Papers 67(3): 740-759. Free download here: https://goo.gl/o9QTA8.
• Sabatini, F., Sarracino, F. (2016). Keeping up with the e-Joneses: Do Online Social Networks Raise Social Comparisons? FEEM Working Paper 2016.32. Free download here: https://goo.gl/EMs1wd.
• Sabatini, F., Sarracino, F. (2017). Online networks and well-being. Kyklos, forthcoming.
Online networks allow for the rapid dissemination of unsubstantiated rumors and conspiracy theories that often elicit rapid, large, but naive social responses. A presentation of some experimental studies.
Main references
• Bessi, A., Zollo, F., Del Vicario, M., Scala, A., Caldarelli, G., Quattrociocchi, W. (2015) Trend of Narratives in the Age of Misinformation. PLoS ONE 10(8): e0134641. Free download here: https://goo.gl/52cjFP.
• Del Vicario, M., Bessi, A., Zollo, F., Petroni, F., Scala, A., Caldarelli, G. Stanley, H. E., Quattrociocchi, W. (2016). The spreading of misinformation online. Proceedings of the National Academy of Science 113(3): 554–559. Free download here: https://goo.gl/z9huyN.
• Quattrociocchi, W., Caldarelli, G., Scala, A. (2014). Opinion dynamics on interacting networks: media competition and social influence. Scientific Reports 4, Article number: 4938. Free download here: https://goo.gl/0arraE.
Part D – Students’ presentations