Esther Duflo, professor of Economics at the Massachusetts Institute of Technology (MIT) and a National Bureau of Economic Research (NBER) Research Associate, delivered last week's Department of Economics and Business departmental seminar to an audience of UPF students and professors.

Prof. Duflo presented research titled "Gossip: Identifying Central Individuals in a Social Network". The study focuses on identifying the channels and effectiveness of gossip in diffusing information. Well known for her novel design of field experimentation and applied public policy, Prof. Duflo's work gives fresh insight on the multi-disciplinary aspects of economics.

The basis of the paper stems from the fact that knowing who is influential or central to a community can be important for the community's members as well as for businesses and policy-makers. Co-authors of the paper include Abhijit Banerjee (MIT), Arun G. Chandrasekhar (Stanford), and Matthew O. Jackson (Stanford).

For economics, gossip can be seen in terms of a social network, where nodes generate pieces of information that are then stochastically passed from neighbour to neighbour. The extent to which a piece of information diffuses among a population often depends on how central the initially informed are within the network. The researchers generated a model that could identify central figures and applied it to 35 Indian villages, accurately identifying people central to information diffusion and not just those people with many friends.

The resulting method is important to Prof. Duflo's on-going involvement in poverty alleviation and development economics studies. As Co-Director of the Abdul Latif Jameel Poverty Action Lab (J-PAL) and Director of the Development Economics programme at the Center for Economic and Policy Research, she is helping understand the interplay between economics and psychology, and creating positive loops to improve decision making.