Building socio-economic Networks: How many conferences should you attend?

Profiting from spillovers is one of the key reasons behind technological collaboration agreements, agglommeration and even social stratification. Previous research has tended to ignore the costs of activities to internalize the externalities. We propose and solve a simple model for the tradeoff between costly socialization and direct productive effort. Our model can explain phenomena like the recent explosion in R&D collaborations or the decline in social capital, while giving a workable framework within which to analyze public policies towards network formation.