Group Segregation in Social Networks

We study strategic behaviour in heterogeneous network formation, where agents are grouped into types and can choose to create or sever links whilst maximising their own private interest. We show the conditions under which social networks exhibit segregated behaviour by groups, as a function of the individual benefits and the costs of linking. By introducing the idea of an individual having a degree of 'tolerance' for others not of their own type, we further show that this enriched framework is able to generate sophisticated intra-group segregation, where a group can shun one of its own members due to the connections that member has. Moreover, we find through simulations that group segregation is an endemic feature and that, as the cost of linking increases, networks converging to a stable state exhibit common characteristics with growing certainty.