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Links and Architecture in Village Networks (previously: Endogenous Network Formation and Informal Institutions in Village Economies)

  • Krishnan, P.
  • Sciubba, E.

This paper o¤ers a bridge between the theoretical literature on endogenous network formation and the empirical work on the impact of social networks on economic performance. We provide a theoretical framework of endogenous network formation that yields testable predictions for the network architectures generated by a particular informal institution common in village economies. We test the implications of the model on data from rural Ethiopia. In contrast to the current literature, we demonstrate the critical role of both number of links and architecture in determining the impact of social networks on outcomes.Social capital matters, but its impact di¤ers by the architecture of the network to which one belongs.

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File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0462.pdf
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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0462.

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Length: 32
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:cam:camdae:0462
Note: DE
Contact details of provider: Web page: http://www.econ.cam.ac.uk/index.htm

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  1. Besley, T. & Coate, S. & Loury, G., 1992. "The economics of Rotating Savings and Credit Associations," Papers 157, Princeton, Woodrow Wilson School - Development Studies.
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  7. William Brock & Steven N. Durlauf, 2000. "Interactions-Based Models," NBER Technical Working Papers 0258, National Bureau of Economic Research, Inc.
  8. Sudipta Sarangi & H. Haller, . "Nash Networks with Heterogeneous Agents," Departmental Working Papers 2003-06, Department of Economics, Louisiana State University.
  9. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-91, May.
  10. Matthew O. Jackson & Asher Wolinsky, 1995. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
  12. Grimard, Franque, 1997. "Household consumption smoothing through ethnic ties: evidence from Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 53(2), pages 391-422, August.
  13. Christopher Udry & Timothy G. Conley, 2004. "Social Networks in Ghana," Working Papers 888, Economic Growth Center, Yale University.
  14. Marcel Fafchamps & Bart Minten, 2000. "Returns to Social Network Capital among Traders," Development Working Papers 145, Centro Studi Luca d\'Agliano, University of Milano.
  15. De Weerdt, Joachim, 2002. "Risk-Sharing and Endogenous Network Formation," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  16. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  17. Manski, C.F., 1990. "The Selection Problem," Working papers 90-12, Wisconsin Madison - Social Systems.
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