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Testing Unilateral and Bilateral Link Formation

  • Comola, Margherita
  • Fafchamps, Marcel

The 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. We 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 or bilateral link formation process. We illustrate this test using survey answers to a risk-sharing question in Tanzania. We 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. We then expand the model to include self-censoring and find that models with self-censoring fit the data best.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7406.

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Date of creation: Aug 2009
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Handle: RePEc:cpr:ceprdp:7406
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  1. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
  2. Jean-Paul Azam & Flore Gubert, 2006. "Migrants' Remittances and the Household in Africa: A Review of Evidence," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 426-462, December.
  3. Arcand, Jean-Louis & Fafchamps, Marcel, 2012. "Matching in community-based organizations," Journal of Development Economics, Elsevier, vol. 98(2), pages 203-219.
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  7. Michele Belot & Marco Francesconi, 2006. "Can Anyone be "The" One? Evidence on Mate Selection from Speed Dating," Economics Discussion Papers 620, University of Essex, Department of Economics.
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  9. Abigail Barr & Mattea Stein, 2008. "Status and egalitarianism in traditional communities: An analysis of funeral attendance in six Zimbabwean villages," CSAE Working Paper Series 2008-26, Centre for the Study of African Economies, University of Oxford.
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  12. Garance Genicot & Debraj Ray, 2003. "Group Formation in Risk--Sharing Arrangements," Review of Economic Studies, Wiley Blackwell, vol. 70(1), pages 87-113, January.
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  15. Platteau, J.P., 1996. "Traditional Sharing Norms as an Obstacle to Economic Growth in Tribal Societies," Papers 173, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  16. COMOLA Margherita, 2007. "The network structure of informal arrangements : evidence from rural Tanzania," Research Unit Working Papers 0708, Laboratoire d'Economie Appliquee, INRA.
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