Andrea Galeotti selected for funding by ERC for Advanced Grant

A research proposal from London Business School’s Professor Andrea Galeotti has been selected for funding by the European Research Council (ERC).

The €1.96m ERC's Advanced Grant 2023 will fund a five-year project, titled, Social structure, Homophily and Outcomes. Homophily, or the fact that similar individuals tend to interact with each other, is a prominent feature of economic and social networks.

Professor Andrea Galeotti, who is an expert in the economics of networks, has explored this subject in several earlier studies, publishing papers with distinguished co-authors, and providing support to the work of colleagues in the academic community engaged in similar research.

In this new 60-month research project, Professor Galeotti will aim to determine the causal effect of social structure and homophily on individual outcomes. This will be one of the principal challenges of the study that he and his colleague, Professor Adam Szeidl from the Central European University in Budapest, and a planned five London Business School PhD students, will face.

Professor Galeotti notes in his application for the ERC grant, that it is ‘difficult to differentiate whether homophily or individual characteristics drive network location and individual choices [and that this will be] overcome by collecting two novel datasets featuring: first, random variation in the initial social structure in which individuals are embedded and, second, extensive information on subsequent career choices, wellbeing, and social interactions’. He adds, ‘These features allow us to document causal patterns of social structure and homophily on entrepreneurship, career choices, well-being, and social interactions’.

The research will, explains Professor Galeotti, advance the economics of networks literature by documenting causal patterns of social structure and homophily on entrepreneurship, career outcomes and well-being, and on social interactions per se. The study will also develop a new theoretical model of endogenous interaction that considers individuals with multiple characteristics, and estimate the model to distinguish two drivers of social interactions: chance versus preferences.

Speaking about the ERC award, Professor Galeotti said: “It is an honour for me to receive such a competitive grant. I am fortunate to collaborate on this ambitious project with fantastic scholars, like Adam Szeidl, and with fantastic PhD students, like David Abraham. I hope the project will provide new insights on how connections form, how can we incentivise the formation of social networks that are effective in supporting individuals in their decision making."

Professor Galleoti’s research focuses on the economics of networks. He was previously Professor of Economics at the European University Institute in Florence. His papers have been published in journals including Econometrica, The Review of Economic Studies and The American Economic Review. He is the holder of the Leverhulme Prize 2011 for the best economist in the U.K. under the age of 35 and he is a recipient of a European Research Consolidator Grant in 2017 and a earlier European Research Starting Grant in 2011.

Professor Galleoti’s research application was submitted before the UK’s association with Horizon Europe, and therefore funds will come directly from the UK Research and Innovation (UKRI) guarantee.

Commenting on the ERC award, the Dean of London Business, Sergei Guriev, said: “I am excited to congratulate Andrea on this great news. ERC Advanced are the most important and highly competitive research grants in Europe. As a professor of economics at LBS, I am proud to be Andrea’s fellow subject area member. This exciting project will further reinforce Andrea’s reputation as one of the leading microeconomists in the UK and Europe. I am also looking forward to the project’s results: as Andrea is going to analyse LBS student data, his project will have direct implications for our teaching and learning strategy."