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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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File URL: http://www.dii.uchile.cl/~cea/sitedev/cea/www/download.php?file=documentos_trabajo/ASOCFILE120080826165437.pdf
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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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  19. 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).
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  22. Samuel Bowles & Herbert Gintis, 2002. "Social Capital and Community Governance," Economic Journal, Royal Economic Society, vol. 112(483), pages 419-436, November.
  23. 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).
  24. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
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Citations

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Cited by:
  1. Stephen Machin & Panu Pelkonen & Kjell Salvanes, 2008. "Education and Mobility," CEE Discussion Papers 0100, Centre for the Economics of Education, LSE.
  2. Alexandre Janiak & Quentin David & Etienne Wasmer, 2008. "Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment," Sciences Po publications 3669, Sciences Po.
  3. Alexandre Janiak, 2008. "Welfare in models of trade with heterogeneous firms," Documentos de Trabajo 253, Centro de Economía Aplicada, Universidad de Chile.
  4. David, Quentin & Janiak, Alexandre & Wasmer, Etienne, 2010. "Local social capital and geographical mobility," Journal of Urban Economics, Elsevier, vol. 68(2), pages 191-204, September.
  5. 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.

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