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But in the 1980s the lower agricultural subcast the

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Unformatted text preview: ris, the Palanpuris, the Kathiawaris—in the same way that Antwerp and New York diamond trade used to be dominated by ultra-Orthodox Jews. Initially, the Marwaris and the Palanpuris dominated Indian diamond trade. But in the 1980s, the lower agricultural subcast, the Kathiawaris, started dominating much of Indian exports. 21 Networks: Lecture 1 Introduction Examples of “Network Effects” (continued) What explains the rise of the Kathiawaris? India does not produce rough diamonds, so mostly brought from Antwerp. But legal contracts difficult to enforce, particularly for small traders, thus trust relations especially important. The Marwaris and the Palanpuris institutionalized their relationship with Antwerp (often opening branches of their firms there). Moreover, over time, lower intermarriage rates for these groups. Network relationships seem to matter less. The Kathiawaris initially a lower, agricultural subcast, some of them working as cutters for the Marwaris and the Palanpuris. Strong network ties, intermarriage rates etc. After the increase in the world supply of rough diamonds in the 1970s (following the opening the Australia’s Argyle Mines), the Kathiawaris slowly dominate the business. Mutual support, referrals, long-term relationships based on networks. 22 Networks: Lecture 1 Introduction Examples of “Network Effects” (continued) How do people learn about new products? Example: the Japanese graphic novel. “Cult following” for movies or records. How does a new technology spread? More important examples: the diffusion of new technologies and agriculture. Famous example: hybrid corn in the United States in the early 20th century. Spreading with a clear special pattern. Word-of-mouth from the early adopters important. Similar patterns seen in prescription of new medication by doctors in the Midwest in the 1960s. How do people form their political, social and religious opinions? Imitate family, friends and neighbors? Wisdom of the crowds? More sophisticated information aggregation by talking and observing friends and news sources? Does the social network matter? 23 Networks: Lecture 1 Introduction Another Pertinent Question Have the tremendous advances in information and communication technology changed the nature of social networks? Recall that Frigyes Karinthy had suggested that the world had become small only recently at the beginning of the 20th century. Perhaps it has become small now? Do new communication mediums such as Facebook, MySpace, Twitter change what type of information we obtain and how we process information? Most people use new mediums to communicate with a small group. Recall the political blogs. Certainly, the web does not seem to automatically guarantee greater that each individual will obtain a greater diversity of opinions. Perhaps greater access to information can increase “herding”— excessive copying of others behavior and information instead of “wisdom of crowds” phenomena. 24 Networks: Lecture 1 A Little Bit of Analysis Ne...
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