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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
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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- Fall '09