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Local social capital and geographical mobility. A theory

Listed author(s):
  • Quentin David
  • Alexandre Janiak
  • Etienne Wasmer

    ()

In this paper we study a large class of resource allocation problems with an important complication, the utilization cost of a given resource is private information of a profit maximizing agent. After reviewing the characterization of the optimal bayesian mechanism, we study the informational cost introduced by the presence of private information. Our main result is to provide an upper bound for the ratio between the cost under asymmetric information and the cost of a fully informed designer, which is independent of the combinatorial nature of the problem and tight. We also show that this bound holds for a variation of the Vickrey-Clark-Groves mechanism. Finally we point out implementation issues of the optimal mechanism.

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File URL: http://www.dii.uchile.cl/~cea/sitedev/cea/www/download.php?file=documentos_trabajo/ASOCFILE120080826165437.pdf
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Paper provided by Centro de Economía Aplicada, Universidad de Chile in its series Documentos de Trabajo with number 248.

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Date of creation: 2008
Handle: RePEc:edj:ceauch:248
Contact details of provider: Web page: http://www.dii.uchile.cl/cea/

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  1. Wasmer, Etienne, 2002. "Interpreting Europe and US Labor Markets Differences: The Specificity of Human Capital Investments," IZA Discussion Papers 549, Institute for the Study of Labor (IZA).
  2. Quentin David & Alexandre Janiak & Etienne Wasmer, 2008. "Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment," Working Papers hal-00972828, HAL.
  3. Calvó-Armengol, Antoni & Zenou, Yves, 2003. "Job Matching, Social Network and Word-of-Mouth Communication," IZA Discussion Papers 771, Institute for the Study of Labor (IZA).
  4. de Marti, Joan & Zenou, Yves, 2009. "Social Networks," Working Paper Series 816, Research Institute of Industrial Economics.
  5. Bertola, Giuseppe & Rogerson, Richard, 1997. "Institutions and labor reallocation," European Economic Review, Elsevier, vol. 41(6), pages 1147-1171, June.
  6. Hassler, John & Mora, José V Rodríguez & Storesletten, Kjetil & Zilibotti, Fabrizio, 2001. "A Positive Theory of Geographic Mobility and Social Insurance," CEPR Discussion Papers 2964, C.E.P.R. Discussion Papers.
  7. Luis Ubeda & Antonio Spilimbergo, 2002. "A Model of Multiple Equilibria in Geographic Labor Mobility," IMF Working Papers 02/31, International Monetary Fund.
  8. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
  9. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
  10. Cahuc, Pierre & Fontaine, Francois, 2002. "On the Efficiency of Job Search with Social Networks," IZA Discussion Papers 583, Institute for the Study of Labor (IZA).
  11. Yann Algan & Pierre Cahuc, 2005. "The Roots of Low European Employment : Family Culture?," Sciences Po publications 1683, Sciences Po.
  12. Paul Winters & Alain de Janvry & Elisabeth Sadoulet, 2001. "Family and Community Networks in Mexico-U.S. Migration," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 159-184.
  13. Calvó-Armengol, Antoni & Verdier, Thierry & Zenou, Yves, 2006. "Strong and Weak Ties in Employment and Crime," CEPR Discussion Papers 5448, C.E.P.R. Discussion Papers.
  14. Samuel Bowles & Herbert Gintis, 2001. "Social Capital and Community Governance," Working Papers 01-01-003, Santa Fe Institute.
  15. Lars Ljungqvist & Thomas J. Sargent, 1998. "The European Unemployment Dilemma," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 514-550, June.
  16. Belot, Michèle & Ermisch, John, 2006. "Friendship ties and geographical mobility: evidence from the BHPS," ISER Working Paper Series 2006-33, Institute for Social and Economic Research.
  17. Giuseppe Bertola & Andrea Ichino, 1995. "Wage Inequality and Unemployment: United States versus Europe," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 13-66 National Bureau of Economic Research, Inc.
  18. repec:spo:wpecon:info:hdl:2441/8810 is not listed on IDEAS
  19. repec:cmf:wpaper:wp2004_06 is not listed on IDEAS
  20. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, vol. 94(3), pages 426-454, June.
  21. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1056-1093, December.
  22. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  23. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
  24. repec:spo:wpecon:info:hdl:2441/8808 is not listed on IDEAS
  25. Bentolila, Samuel & Michelacci, Claudio & Suarez, Javier, 2004. "Social Contacts and Occupational Choice," CEPR Discussion Papers 4308, C.E.P.R. Discussion Papers.
  26. Spilimbergo, Antonio & Ubeda, Luis, 2004. "Family attachment and the decision to move by race," Journal of Urban Economics, Elsevier, vol. 55(3), pages 478-497, May.
  27. Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  28. Krishna B. Kumar & John G. Matsusaka, 2004. "Village versus Market Social Capital: An Approach to Development," Development and Comp Systems 0408003, EconWPA.
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