Testing Unilateral and Bilateral Link Formation
AbstractThe literature has shown that network architecture depends crucially on whether links are formed unilaterally or bilaterally, that is, on whether the consent of both nodes is required for a link to be formed. They propose a test of whether network data is best seen as an actual link or willingness to link and, in the latter case, whether this link is generated by an unilateral o rbilateral link formation process. They illustrate this test using survey answers to a risk-sharing question inTanzania. They find that the bilateral link formation model fits the data better than the unilateral model, but the data are best interpreted as willingness to link rather than an actual link. They then expand the model to include self-censoring and find that models with self-censoring fit the data best. [Working Paper No. 236]
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network architecture; pairwise stability; risk sharing;
Other versions of this item:
- Margherita Comola & Marcel Fafchamps, 2009. "Testing Unilateral and Bilateral Link Formation," CSAE Working Paper Series 2009-13, Centre for the Study of African Economies, University of Oxford.
- Comola, Margherita & Fafchamps, Marcel, 2009. "Testing Unilateral and Bilateral Link Formation," CEPR Discussion Papers 7406, C.E.P.R. Discussion Papers.
- Margherita Comola & Marcel Fafchamps, 2009. "Testing unilateral and bilateral link formation," PSE Working Papers halshs-00574971, HAL.
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
- NEP-GTH-2010-09-11 (Game Theory)
- NEP-NET-2010-09-11 (Network Economics)
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