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Matching and network effects

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Author Info

  • Marcel Fafchamps

    () (University of Oxford)

  • Marco van der Leij

    () (Universidad de Alicante)

  • Sanjeev Goyal

    (Department of Economics, Queen Mary)

Abstract

The matching of individuals in teams is a key element in the functioning of an economy. The network of social ties can potentially transmit important information on abilities and reputations and also help mitigate matching frictions by facilitating interactions among ¿screened¿ individuals. We conjecture that the probability of i and j forming a team is falling in the distance between i and j in the network of existing social ties. The objective of this paper is to empirically test this conjecture. We examine the formation of coauthor relations among economists over a twenty year period. Our principal finding is that a new collaboration emerges faster among two researchers if they are ¿closer" in the existing coauthor network among economists. This proximity effect on collaboration is strong: being at a network distance of 2 instead of 3, for instance, raises the probability of initiating a collaboration by 27 percent. Research collaboration takes place in an environment where fairly detailed information concerning individual ability and productivity -reflected in publications, employment history, etc.- is publicly available. Our finding that social networks are powerful even in this setting suggests that they must affect matching processes more generally.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2009-15.pdf
File Function: Fisrt version / Primera version, 2009
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2009-15.

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Length: 54 pages
Date of creation: Jan 2009
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2009-15

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Keywords: coauthorship network; matching; network effects; network formation.;

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References

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  1. Marcel Fafchamps, 2004. "Market Institutions in Sub-Saharan Africa: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062364.
  2. De Weerdt, Joachim & Dercon, Stefan, 2006. "Risk-sharing networks and insurance against illness," Journal of Development Economics, Elsevier, vol. 81(2), pages 337-356, December.
  3. Marco van der Leij & Sanjeev Goyal, 2006. "Strong Ties in a Small World," Tinbergen Institute Discussion Papers 06-008/1, Tinbergen Institute.
  4. Fafchamps, Marcel & Lund, Susan, 2003. "Risk-sharing networks in rural Philippines," Journal of Development Economics, Elsevier, vol. 71(2), pages 261-287, August.
  5. Garance Genicot & Debraj Ray, 2003. "Group Formation in Risk--Sharing Arrangements," Review of Economic Studies, Wiley Blackwell, vol. 70(1), pages 87-113, January.
  6. Marcel Fafchamps, 2002. "Returns to social network capital among traders," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 173-206, April.
  7. Sanjeev Goyal & Marco van der Leij & José Luis Moraga Gonzales, 2004. "Economics: An Emerging Small World?," CESifo Working Paper Series 1287, CESifo Group Munich.
  8. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
  9. Stefan Dercon & Joachim De Weerdt, 2002. "Risk-sharing Networks and Insurance against illness," Economics Series Working Papers WPS/2002-16, University of Oxford, Department of Economics.
  10. Marcel Fafchamps & Flore Gubert, 2005. "The Formation of Risk Sharing Networks," Working Papers DT/2005/13, DIAL (Développement, Institutions et Mondialisation).
  11. Paul Oyer, 2006. "Initial Labor Market Conditions and Long-Term Outcomes for Economists," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 143-160, Summer.
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Citations

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Cited by:
  1. Cilem Selin Hazir, 2011. "Conceptualizing the Role of Geographical Proximity in Project Based R&D Networks: A Literature Survey," ERSA conference papers ersa11p1616, European Regional Science Association.
  2. Marco van der Leij & Jaromir Kovarik, 2012. "Risk aversion and social networks," Working Papers. Serie AD 2012-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Matthias Krapf, 2012. "Age and Complementarity in Scientific Collaboration," Working Paper Series of the Department of Economics, University of Konstanz 2012-18, Department of Economics, University of Konstanz.
  4. Ernest Miguélez, 2012. "How do geographically mobile innovators influence network formation?," Papers in Evolutionary Economic Geography (PEEG) 1208, Utrecht University, Section of Economic Geography, revised May 2012.
  5. Lorenzo Cassi & Anne Plunket, 2010. "The determinants of co-inventor tie formation: proximity and network dynamics," Papers in Evolutionary Economic Geography (PEEG) 1015, Utrecht University, Section of Economic Geography, revised Nov 2010.
  6. Cassi, Lorenzo & Plunket, Anne, 2012. "Research collaboration in co-­inventor networks: combining closure,bridging and proximities," MPRA Paper 39481, University Library of Munich, Germany.
  7. Cilem Selin Hazir & Corinne Autant-Bernard, 2012. "Using Affiliation Networks to Study the Determinants of Multilateral Research Cooperation Some empirical evidence from EU Framework Programs in biotechnology," Working Papers 1212, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  8. Yann Bramoullé & Bernard Fortin, 2009. "The Econometrics of Social Networks," Cahiers de recherche 0913, CIRPEE.
  9. Berger, Allen N. & Kick, Thomas & Koetter, Michael & Schaeck, Klaus, 2011. "Does it pay to have friends? Social ties and executive appointments in banking," Discussion Paper Series 2: Banking and Financial Studies 2011,18, Deutsche Bundesbank, Research Centre.
  10. Michael Koenig, 2012. "The Formation of Networks with Local Spillovers and Limited Observability," Discussion Papers 11-004, Stanford Institute for Economic Policy Research.

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