IDEAS home Printed from https://ideas.repec.org/a/spr/eaiere/v17y2020i1d10.1007_s40844-019-00137-1.html
   My bibliography  Save this article

Network centrality, social loops, and utility maximization

Author

Listed:
  • Hideki Fujiyama

    (Dokkyo University)

Abstract

This study examines the effect of social loops on individual effort. Under a situation wherein agents’ effort induces additional efforts to others through a network, an optimum effort corresponds to the subgraph centrality that captures the number of social loops in a network. In contrast to Bonacich centrality, this centrality avoids a problem of divergence and it is based on bounded rational behaviors. We tested this theoretical fact using data for 122 Japanese university sophomores and juniors from 2013 to 2018. Bonacich cenrality had a divergence problem in all cases. On the other hand, students who had a higher subgraph centrality index tended to put forth more efforts in a class after controlling for the individual characteristics. Subgraph centrality had a robust effect even if we added an effect of other centralities, i.e., out-degree, in-degree, betweenness, and closeness centralities. This fact shows that the social loop of communication was critical in the class of university students.

Suggested Citation

  • Hideki Fujiyama, 2020. "Network centrality, social loops, and utility maximization," Evolutionary and Institutional Economics Review, Springer, vol. 17(1), pages 39-70, January.
    • Handle: RePEc:spr:eaiere:v:17:y:2020:i:1:d:10.1007_s40844-019-00137-1
    DOI: 10.1007/s40844-019-00137-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40844-019-00137-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40844-019-00137-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wei Pan, 2001. "Akaike's Information Criterion in Generalized Estimating Equations," Biometrics, The International Biometric Society, vol. 57(1), pages 120-125, March.
    2. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    3. Antoni Calvó-Armengol & Eleonora Patacchini & Yves Zenou, 2009. "Peer Effects and Social Networks in Education," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1239-1267.
    4. Gino Cattani & Simone Ferriani, 2008. "A Core/Periphery Perspective on Individual Creative Performance: Social Networks and Cinematic Achievements in the Hollywood Film Industry," Organization Science, INFORMS, vol. 19(6), pages 824-844, December.
    5. Manju K. Ahuja & Dennis F. Galletta & Kathleen M. Carley, 2003. "Individual Centrality and Performance in Virtual R& D Groups: An Empirical Study," Management Science, INFORMS, vol. 49(1), pages 21-38, January.
    6. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2017. "The Economic Consequences of Social-Network Structure," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 49-95, March.
    7. Gerhard G. Van De Bunt & Marijtje A.J. Van Duijn & Tom A.B. Snijders, 1999. "Friendship Networks Through Time: An Actor-Oriented Dynamic Statistical Network Model," Computational and Mathematical Organization Theory, Springer, vol. 5(2), pages 167-192, July.
    8. Yael V. Hochberg & Alexander Ljungqvist & Yang Lu, 2007. "Whom You Know Matters: Venture Capital Networks and Investment Performance," Journal of Finance, American Finance Association, vol. 62(1), pages 251-301, February.
    9. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    10. Patacchini, Eleonora & Rainone, Edoardo & Zenou, Yves, 2017. "Heterogeneous peer effects in education," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 190-227.
    11. Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves, 2014. "Endogenous peer effects: local aggregate or local average?," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 39-59.
    12. Leo Katz, 1953. "A new status index derived from sociometric analysis," Psychometrika, Springer;The Psychometric Society, vol. 18(1), pages 39-43, March.
    13. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tao Shi & Yurong Qiao & Qian Zhou, 2021. "Spatiotemporal evolution and spatial relevance of urban resilience: Evidence from cities of China," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2364-2390, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 561-624, Elsevier.
    2. Ushchev, Philip & Zenou, Yves, 2020. "Social norms in networks," Journal of Economic Theory, Elsevier, vol. 185(C).
    3. Zenou, Yves, 2014. "Key Players," CEPR Discussion Papers 10277, C.E.P.R. Discussion Papers.
    4. Zenou, Yves & Lindquist, Matthew & Sauermann, Jan, 2015. "Network Effects on Worker Productivity," CEPR Discussion Papers 10928, C.E.P.R. Discussion Papers.
    5. Arun Advani & Bansi Malde, 2018. "Methods to identify linear network models: a review," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 154(1), pages 1-16, December.
    6. Jackson, Matthew O. & Zenou, Yves, 2015. "Games on Networks," Handbook of Game Theory with Economic Applications,, Elsevier.
    7. Hahn, Youjin & Islam, Asadul & Patacchini, Eleonora & Zenou, Yves, 2015. "Network Structure and Education Outcomes: Evidence from a Field Experiment in Bangladesh," IZA Discussion Papers 8872, Institute of Labor Economics (IZA).
    8. de Martí, Joan & Zenou, Yves, 2015. "Network games with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 221-240.
    9. Zenou, Yves & Olcina, Gonzalo & Panebianco, Fabrizio, 2017. "Conformism, Social Norms and the Dynamics of Assimilation," CEPR Discussion Papers 12166, C.E.P.R. Discussion Papers.
    10. Zenou, Yves & Patacchini, Eleonora & Islam, Asad, 2015. "Teams, Organization and Education Outcomes: Evidence from a field experiment in Bangladesh," CEPR Discussion Papers 10631, C.E.P.R. Discussion Papers.
    11. Arun Advani & Bansi Malde, 2014. "Empirical methods for networks data: social effects, network formation and measurement error," IFS Working Papers W14/34, Institute for Fiscal Studies.
    12. Zenou, Yves & Chen, Ying-Ju & Zhou, Junjie, 2015. "Multiple Activities for Socially-Connected Criminals," CEPR Discussion Papers 10709, C.E.P.R. Discussion Papers.
    13. Ismael Mourifié, 2019. "A marriage matching function with flexible spillover and substitution patterns," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(2), pages 421-461, March.
    14. Díaz, Carlos & Patacchini, Eleonora & Verdier, Thierry & Zenou, Yves, 2021. "Leaders in juvenile crime," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 638-667.
    15. Dequiedt, Vianney & Zenou, Yves, 2017. "Local and consistent centrality measures in parameterized networks," Mathematical Social Sciences, Elsevier, vol. 88(C), pages 28-36.
    16. Yann Algan & Quoc-Anh Do & Nicolò Dalvit & Alexis Le Chapelain & Yves Zenou, 2015. "How Social Networks Shape Our Beliefs: A Natural Experiment among Future French Politicians," Working Papers hal-03459820, HAL.
    17. Gibbons, Steve & Overman, Henry G. & Patacchini, Eleonora, 2015. "Spatial Methods," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 115-168, Elsevier.
    18. Chih‐Sheng Hsieh & Lung‐Fei Lee & Vincent Boucher, 2020. "Specification and estimation of network formation and network interaction models with the exponential probability distribution," Quantitative Economics, Econometric Society, vol. 11(4), pages 1349-1390, November.
    19. Zenou, Yves, 2012. "Networks in Economics," CEPR Discussion Papers 9021, C.E.P.R. Discussion Papers.
    20. de Marti, Joan & Zenou, Yves, 2009. "Social Networks," Working Paper Series 816, Research Institute of Industrial Economics.

    More about this item

    Keywords

    Subgraph centrality; Micro-foundation of centralities; Peer influence; University student network;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • I20 - Health, Education, and Welfare - - Education - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eaiere:v:17:y:2020:i:1:d:10.1007_s40844-019-00137-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.