Inequality and network structure

► This paper studies how the structure of a social network constrains the level of inequality that can be sustained. ► If a group of players in a network can deviate only when they are directly connected, a key determinant is the size of the maximum independent set of the network. ► In bipartite networks, the size of the maximum independent set fully characterizes the maximum level of inequality that can be sustained. ► A partial characterization is provided for general networks.