Game Changer - the game theory podcast The Power of Connection – A Game Theoretic View on Networks | with Matthew Jackson
Oct 27, 2025
Matthew Jackson, the William D. Eberle Professor of Economics at Stanford, dives into the fascinating realm of networks and game theory. He discusses how personal connections influence job opportunities and market dynamics. The power of networks is explored through intriguing examples like the Medici family's rise in Florence and how tariffs can increase geopolitical risks by disrupting trade. He highlights that weak ties often play a crucial role in job searches, revealing the complexity of trust and cooperation in economic systems.
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Networks Drive Economic Behavior
- Networks shape behavior by determining information flow and opportunities people receive.
- Economists must model social structures because anonymous-market assumptions often fail.
Karnataka Risk Sharing Example
- Jackson describes a Karnataka study where villagers report who they borrow kerosene and rice from.
- Those borrowing ties reveal caste-based segregation that limits information and risk sharing.
Network Externalities Are First Order
- Individual interactions create externalities because each person is embedded in wider networks.
- You must model the whole network to understand diffusion and risk sharing accurately.
