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Local social capital and geographical mobility. A theory

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  • Quentin David
  • Alexandre Janiak
  • Etienne Wasmer

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Abstract

In this paper we study a large class of resource allocation problems with an important complication, the utilization cost of a given resource is private information of a profit maximizing agent. After reviewing the characterization of the optimal bayesian mechanism, we study the informational cost introduced by the presence of private information. Our main result is to provide an upper bound for the ratio between the cost under asymmetric information and the cost of a fully informed designer, which is independent of the combinatorial nature of the problem and tight. We also show that this bound holds for a variation of the Vickrey-Clark-Groves mechanism. Finally we point out implementation issues of the optimal mechanism.

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Bibliographic Info

Paper provided by Centro de Economía Aplicada, Universidad de Chile in its series Documentos de Trabajo with number 248.

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Date of creation: 2008
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Handle: RePEc:edj:ceauch:248

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Web page: http://www.dii.uchile.cl/cea/
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  1. Wasmer, Etienne, 2002. "Interpreting Europe and US Labor Markets Differences: The Specificity of Human Capital Investments," IZA Discussion Papers 549, Institute for the Study of Labor (IZA).
  2. Bertola, Giuseppe & Rogerson, Richard, 1997. "Institutions and labor reallocation," European Economic Review, Elsevier, vol. 41(6), pages 1147-1171, June.
  3. Hassler, John & Mora, José V Rodríguez & Storesletten, Kjetil & Zilibotti, Fabrizio, 2001. "A Positive Theory of Geographic Mobility and Social Insurance," CEPR Discussion Papers 2964, C.E.P.R. Discussion Papers.
  4. Luis Ubeda & Antonio Spilimbergo, 2002. "A Model of Multiple Equilibria in Geographic Labor Mobility," IMF Working Papers 02/31, International Monetary Fund.
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  8. Algan, Yann & Cahuc, Pierre, 2005. "The Roots of Low European Employment: Family Culture?," CEPR Discussion Papers 5169, C.E.P.R. Discussion Papers.
  9. Paul Winters & Alain de Janvry & Elisabeth Sadoulet, 2001. "Family and Community Networks in Mexico-U.S. Migration," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 159-184.
  10. Calvó-Armengol, Antoni & Verdier, Thierry & Zenou, Yves, 2006. "Strong and Weak Ties in Employment and Crime," CEPR Discussion Papers 5448, C.E.P.R. Discussion Papers.
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  12. Bentolila, Samuel & Michelacci, Claudio & Suarez, Javier, 2004. "Social Contacts and Occupational Choice," CEPR Discussion Papers 4308, C.E.P.R. Discussion Papers.
  13. Lamo, Ana & Fredriksson, Peter & Messina, Julian & Peri, Giovanni & Wasmer, Etienne, 2005. "Macroeconomics of Education," Open Access publications from Sciences Po info:hdl:2441/9064, Sciences Po.
  14. repec:ese:iserwp:2006-33 is not listed on IDEAS
  15. Giuseppe Bertola & Andrea Ichino, 1995. "Wage Inequality and Unemployment: United States versus Europe," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 13-66 National Bureau of Economic Research, Inc.
  16. Antonio Spilimbergo & Luis Ubeda, 2002. "Family Attachment and the Decision to Move by Race," IMF Working Papers 02/83, International Monetary Fund.
  17. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, vol. 94(3), pages 426-454, June.
  18. Belot, Michèle & Ermisch, John, 2006. "Friendship Ties and Geographical Mobility: Evidence from the BHPS," IZA Discussion Papers 2209, Institute for the Study of Labor (IZA).
  19. Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  20. Krishna B. Kumar & John G. Matsusaka, 2004. "Village versus Market Social Capital: An Approach to Development," Development and Comp Systems 0408003, EconWPA.
  21. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
  22. David, Quentin & Janiak, Alexandre & Wasmer, Etienne, 2008. "Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment," IZA Discussion Papers 3669, Institute for the Study of Labor (IZA).
  23. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
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Cited by:
  1. Stephen Machin & Kjell G. Salvanes & Panu Pelkonen, 2012. "Education And Mobility," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 417-450, 04.
  2. Alexandre Janiak, 2008. "Welfare in models of trade with heterogeneous firms," Documentos de Trabajo 253, Centro de Economía Aplicada, Universidad de Chile.
  3. David, Quentin & Janiak, Alexandre & Wasmer, Etienne, 2008. "Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment," IZA Discussion Papers 3669, Institute for the Study of Labor (IZA).
  4. Viviana Fernández & Brian M. Lucey, 2008. "Emerging Markets Variance Shocks: Local or International in Origin?," Documentos de Trabajo 251, Centro de Economía Aplicada, Universidad de Chile.
  5. Quentin Max David & Alexandre Janiak & Etienne Wasmer, 2012. "Local social capital and geographical mobility," ULB Institutional Repository 2013/133081, ULB -- Universite Libre de Bruxelles.

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