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Endogenous Network Production Functions with Selectivity

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Abstract

We consider a production function model that transforms worker inputs into outputs through peer effect networks. The distinguishing features of this production model are that the network is formal and observable through worker scheduling, and selection into the network is done by a manager. We discuss identification and suggest a variety of estimation techniques. In particular, we tackle endogeneity issues arising from selection into groups and exposure to common group factors by employing a polychotomous Heckman-type selection correction. We illustrate our method using data from the Syracuse University Men’s Basketball team, where at any point in time the coach selects a lineup and the players interact strategically to win games.

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Bibliographic Info

Paper provided by Center for Policy Research, Maxwell School, Syracuse University in its series Center for Policy Research Working Papers with number 168.

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Length: 34 pages
Date of creation: May 2014
Date of revision:
Handle: RePEc:max:cprwps:168

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Keywords: Stochastic Frontier Model; Spatial Autoregressive Model; Peer Effects; Endogenous Network Formation; Selectivity;

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  15. Paul Goldsmith-Pinkham & Guido W. Imbens, 2013. "Social Networks and the Identification of Peer Effects," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(3), pages 253-264, July.
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  20. Jonathan Guryan & Kory Kroft & Matt Notowidigdo, 2007. "Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments," NBER Working Papers 13422, National Bureau of Economic Research, Inc.
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