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Local social capital and geographical mobility. A theory

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

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  1. Belot, Michèle & Ermisch, John, 2006. "Friendship Ties and Geographical Mobility: Evidence from the BHPS," IZA Discussion Papers 2209, Institute for the Study of Labor (IZA).
  2. de Marti, Joan & Zenou, Yves, 2009. "Social Networks," Working Paper Series 816, Research Institute of Industrial Economics.
  3. 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.
  4. John Hassler & José Vicente Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2003. "A Positive Theory of Geographic Mobility and Social Insurance," Working Papers 86, Barcelona Graduate School of Economics.
  5. Etienne Wasmer, 2006. "Interpreting Europe and US labor markets differences : the specificity of human capital investments," Sciences Po publications info:hdl:2441/8904, Sciences Po.
  6. 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.
  7. Matt Jackson, 2003. "The Effects of Social Networks on Employment and Inequality," Theory workshop papers 658612000000000032, UCLA Department of Economics.
  8. David, Quentin & Janiak, Alexandre & Wasmer, Etienne, 2008. "Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment," IZA Discussion Papers 3669, Institute for the Study of Labor (IZA).
  9. Calvo-Armengol, Antoni & Verdier, Thierry & Zenou, Yves, 2007. "Strong and weak ties in employment and crime," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 203-233, February.
  10. repec:spo:wpecon:info:hdl:2441/8810 is not listed on IDEAS
  11. Samuel Bentolila & Claudio Michelacci & Javier Suarez, 2004. "Social Contacts And Occupational Choice," Working Papers wp2004_06, CEMFI.
  12. Bertola, Giuseppe & Rogerson, Richard, 1996. "Institutions and Labour Reallocation," CEPR Discussion Papers 1519, C.E.P.R. Discussion Papers.
  13. Samuel Bowles & Herbert Gintis, 2001. "Social Capital and Community Governance," Working Papers 01-01-003, Santa Fe Institute.
  14. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
  15. 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.
  16. Spilimbergo, Antonio & Ubeda, Luis, 2004. "A model of multiple equilibria in geographic labor mobility," Journal of Development Economics, Elsevier, vol. 73(1), pages 107-123, February.
  17. Krishna B. Kumar & John G. Matsusaka, 2004. "Village versus Market Social Capital: An Approach to Development," Development and Comp Systems 0408003, EconWPA.
  18. Winters, Paul C. & de Janvry, Alain & Sadoulet, Elisabeth, 1999. "Family And Community Networks In Mexico-U.S. Migration," Working Papers 12907, University of New England, School of Economics.
  19. 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.
  20. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-18, December.
  21. 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).
  22. 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.
  23. Algan, Yann & Cahuc, Pierre, 2005. "The Roots of Low European Employment: Family Culture?," IZA Discussion Papers 1683, Institute for the Study of Labor (IZA).
  24. 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.
  25. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
  26. repec:spo:wpecon:info:hdl:2441/8808 is not listed on IDEAS
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