Advanced Search
MyIDEAS: Login to save this paper or follow this series

Social Interactions and Spillovers

Contents:

Author Info

  • Cabrales, Antonio

    ()
    (Universidad Carlos III de Madrid)

  • Calvó-Armengol, Antoni

    (Universitat Autònoma de Barcelona)

  • Zenou, Yves

    ()
    (Dept. of Economics, Stockholm University)

Abstract

The aim of this paper is to provide a tractable model where both socialization (or network formation) and productive efforts can be analyzed simultaneously. This permits a full-fledged equilibrium/welfare analysis of network formation with endogenous productive efforts and heterogeneous agents. We show that there exist two stable interior equilibria, which we can Pareto rank. The socially efficient outcome lies between these two equilibria. When the intrinsic returns to production and socialization increase, all equilibrium actions decrease at the Pareto-superior equilibrium, while they increase at the Pareto-inferior equilibrium. In both cases, the percentage change in socialization effort is higher (in absolute value) than that of the productive effort.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www2.ne.su.se/paper/wp10_20.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2010:20.

as in new window
Length: 37 pages
Date of creation: 08 Nov 2010
Date of revision:
Handle: RePEc:hhs:sunrpe:2010_0020

Contact details of provider:
Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
Phone: +46 8 16 20 00
Fax: +46 8 16 14 25
Email:
Web page: http://www.ne.su.se/
More information through EDIRC

Related research

Keywords: Peer effects; network formation; welfare;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Antoni Calvó-Armengol & Rahmi Ilkiliç, 2004. "Pairwise-Stability and Nash Equilibria in Network Formation," Working Papers 182, Barcelona Graduate School of Economics.
  2. Coralio Ballester & Antoni Calvo-Armengol & Yves Zenou, 2005. "Who's Who in Networks. Wanted: the Key Player," NajEcon Working Paper Reviews 666156000000000586, www.najecon.org.
  3. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
  4. Patacchini, Eleonora & Zenou, Yves, 2007. "Intergenerational Education Transmission: Neighborhood Quality and/or Parents’ Involvement?," IZA Discussion Papers 2608, Institute for the Study of Labor (IZA).
  5. Corchon, Luis C. & Mas-Colell, Andreu, 1996. "On the stability of best reply and gradient systems with applications to imperfectly competitive models," Economics Letters, Elsevier, vol. 51(1), pages 59-65, April.
  6. Alberto Bisin & Thierry Verdier, 2000. ""Beyond The Melting Pot": Cultural Transmission, Marriage, And The Evolution Of Ethnic And Religious Traits," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 955-988, August.
  7. Steven N. Durlauf, 2002. "On the Empirics of Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 459-479, November.
  8. Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
  9. Edward L. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995. "Crime and Social Interactions," NBER Working Papers 5026, National Bureau of Economic Research, Inc.
  10. Luca P. Merlino Autonoma & Andrea Galeotti, 2009. "Endogenous job contact networks," 2009 Meeting Papers 133, Society for Economic Dynamics.
  11. Sanjeev Goyal, 2007. "Introduction to Connections: An Introduction to the Economics of Networks
    [Connections: An Introduction to the Economics of Networks]
    ," Introductory Chapters, Princeton University Press.
  12. Thomas S. Dee, 2003. "Are There Civic Returns to Education?," NBER Working Papers 9588, National Bureau of Economic Research, Inc.
  13. Matthew O. Jackson & Asher Wolinsky, 1994. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  14. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
  15. John F. Helliwell & Robert D. Putnam, 2007. "Education and Social Capital," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 1-19, Winter.
  16. Ioannides, Yannis M. & Soetevent, Adriaan R., 2007. "Social networking and individual outcomes beyond the mean field case," Journal of Economic Behavior & Organization, Elsevier, vol. 64(3-4), pages 369-390.
  17. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521674096, April.
  18. Milligan, Kevin & Moretti, Enrico & Oreopoulos, Philip, 2004. "Does education improve citizenship? Evidence from the United States and the United Kingdom," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1667-1695, August.
  19. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
  20. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521857406, April.
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 in new window

Cited by:
  1. Helsley, Robert & Zenou, Yves, 2011. "Social Networks and Interactions in Cities," Research Papers in Economics 2011:8, Stockholm University, Department of Economics.
  2. Zenou, Yves & König, Michael D. & Tessone, Claudio J., 0. "Nestedness in networks: A theoretical model and some applications," Theoretical Economics, Econometric Society.
  3. Jacques Durieu & Hans Haller & Philippe Solal, 2011. "Nonspecific Networking," Games, MDPI, Open Access Journal, vol. 2(1), pages 87-113, February.
  4. König, Michael & Tessone, Claudio J. & Zenou, Yves, 2009. "A Dynamic Model of Network Formation with Strategic Interactions," CEPR Discussion Papers 7521, C.E.P.R. Discussion Papers.
  5. Lee, Lung-Fei & Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves, 2011. "Criminal Networks: Who is the Key Player?," CEPR Discussion Papers 8185, C.E.P.R. Discussion Papers.
  6. Mohamed Belhaj & Sebastian Bervoets & Frédéric Deroïan, 2013. "Network Design under Local Complementarities," Working Papers halshs-00796487, HAL.
  7. Mohamed Belhaj & Sebastian Bervoets & Frédéric Deroïan, 2013. "Network Design under Local Complementarities," AMSE Working Papers 1309, Aix-Marseille School of Economics, Marseille, France, revised 12 Feb 2013.
  8. Boris van Leeuwen & Theo Offerman & Arthur Schram, 2013. "Superstars Need Social Benefits: An Experiment on Network Formation," Tinbergen Institute Discussion Papers 13-112/I, Tinbergen Institute.
  9. Prat, Andrea & de Martí, Joan & Calvó-Armengol, Antoni, 0. "Communication and influence," Theoretical Economics, Econometric Society.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:sunrpe:2010_0020. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sten Nyberg).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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