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Links and Architecture in Village Networks (previously: Endogenous Network Formation and Informal Institutions in Village Economies)

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  • Krishnan, P.
  • Sciubba, E.

Abstract

This paper o¤ers a bridge between the theoretical literature on endogenous network formation and the empirical work on the impact of social networks on economic performance. We provide a theoretical framework of endogenous network formation that yields testable predictions for the network architectures generated by a particular informal institution common in village economies. We test the implications of the model on data from rural Ethiopia. In contrast to the current literature, we demonstrate the critical role of both number of links and architecture in determining the impact of social networks on outcomes.Social capital matters, but its impact di¤ers by the architecture of the network to which one belongs.

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File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0462.pdf
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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0462.

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Length: 32
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:cam:camdae:0462

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Keywords: Endogenous network formation; rural institutions;

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  2. Andrea Galeotti & Sanjeev Goyal, 2002. "Network Formation with Heterogeneous Players," Tinbergen Institute Discussion Papers 02-069/1, Tinbergen Institute.
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  13. Bandiera, Oriana & Rasul, Imran, 2002. "Social Networks and Technology Adoption in Northern Mozambique," CEPR Discussion Papers 3341, C.E.P.R. Discussion Papers.
  14. Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer, vol. 34(3), pages 319-349, October.
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  18. Christopher Udry & Timothy G. Conley, 2004. "Social Networks in Ghana," Working Papers 888, Economic Growth Center, Yale University.
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