A Micro-foundation of Social Capital in Evolving Social Networks

TL;DR

This paper develops a micro-founded mathematical model to analyze how social network structures and individual behaviors influence the formation and types of social capital, such as bonding, popularity, and bridging capital.

Contribution

It introduces a novel micro-level model linking individual traits and behaviors to the evolution of different social capital types in social networks.

Findings

Homophily increases bonding capital within homogeneous groups.

Popularity capital arises from preferential attachment, favoring already popular individuals.

Less gregarious or opportunistic individuals can gain bridging capital in homophilic societies.

Abstract

A social network confers benefits and advantages on individuals (and on groups), the literature refers to these advantages as social capital. This paper presents a micro-founded mathematical model of the evolution of a social network and of the social capital of individuals within the network. The evolution of the network is influenced by the extent to which individuals are homophilic, structurally opportunistic, socially gregarious and by the distribution of types in the society. In the analysis, we identify different kinds of social capital: bonding capital, popularity capital, and bridging capital. Bonding capital is created by forming a circle of connections, homophily increases bonding capital because it makes this circle of connections more homogeneous. Popularity capital leads to preferential attachment: individuals who become popular tend to become more popular because others are more likely to link to them. Homophily creates asymmetries in the levels of popularity attained by different social groups, more gregarious types of agents are more likely to become popular. However, in homophilic societies, individuals who belong to less gregarious, less opportunistic, or major types are likely to be more central in the network and thus acquire a bridging capital.