Clustering

An article about the interactions between economists and sociologists provides some additional insight into things like clustering and externalities.

Market share - The Boston Globe - Boston.com - Ideas - News: "''It is remarkable that people receive crucial information from individuals whose very existence they have forgotten,' Granovetter wrote in a 1973 article, ''The Strength of Weak Ties.' New information, about jobs or anything else, rarely comes from your close friends, he argued, because they tend to know the same things, and the same people, you know. Your friends may want to help you find a job, but your acquaintances can help you, because they're the people with information about openings you haven't already heard of.
''Weak ties' are your connections to people who don't know each other and who do know other people you don't know. These are ''the channels through which ideas, influences, or information socially distant from [someone] may reach him.'
Today, studying social connections, or ''social networks,' is the hottest field in economic sociology. Focusing on a particular network--the connections between venture capital firms in Silicon Valley, say, or between directors and producers in Hollywood--lets researchers examine the social context of economic decisions."