Political economy … finds the laws underlying a mass of contingent occurrences. It is an interesting spectacle to observe here how all of the interconnections have repercussions on others, how the particular spheres fall into groups, influence others, and are helped or hindered by these. This interaction, which at first sight seems incredible since everything seems to depend on the arbitrary will of the individual, is particularly worthy of note …G. W. F. Hegel, Elements of the Philosophy of Right
Within economics, social interactions research constitutes a growing area of study. This research represents a good faith attempt to introduce substantive sociological factors into economic modeling. As such, this work represents a significant departure from the sorts of market-mediated interdependences between individuals that one finds in general equilibrium theory. While the substantive ideas underlying this work may be found in now-classic papers such as Loury (1977), the modern social interactions literature is quite young. Despite this, there are now an impressive range of applications of social interactions models in microeconomic contexts. Examples of phenomena where empirical evidence of social interactions has been found include (1) crime (Glaeser, Sacerdote, and Scheinkman , Sirakaya ), (2) welfare and public assistance use (Aizer and Currie , Bertrand, Luttmer, and Mullainathan ), (3) fertility (Brooks-Gunn et al. , Rivkin ), (4) housing demand and urban development (Irwin and Bockstaed , Ioannides and Zabel [2003a, b]), (5) contract determination (Young and Burke [2001, 2003]), (6) employment (Oomes , Topa , Weinberg, Reagan, and Yankow ), (7) cigarette smoking (Krauth , Nakajima ), (8) school performance (Boozer and Cacciola , Graham ) and even (9) medical techniques (Burke, Fournier, and Prasad ).