Network Effects and Social Inequality

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…