Expectation Formation and Social Influence
This article investigate the role of social influence for the expectation formation of economic agents. Using self-organizing Kohonen maps the repeated cross-section data set of the University of Michigan consumer survey is transformed into a pseudo panel allowing to monitor the expectation formation of cohorts with regard to business confidence over the whole available time span (January 1978 - June 2013). Subsequently the information theoretic concept of transfer entropy is used to reveal the role of social influence on the expectation formation as well as the underlying network structure. It is shown that social influence strongly depends on socio-demographic characteristics and also coincides with a high degree of connectivity. The social network estimated in this way follows a power-law and thus exhibits similar structure as networks observed in other contexts
|Date of creation:||Feb 2014|
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- Wehrens, Ron & Buydens, Lutgarde M. C., 2007. "Self- and Super-organizing Maps in R: The kohonen Package," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 21(i05).
- Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
- Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
- Marie Cottrell & Patrice Gaubert, 2003. "Efficient estimators : the use of neural networks to construct pseudo panels," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00122817, HAL.
- Burnkrant, Robert E & Cousineau, Alain, 1975. " Informational and Normative Social Influence in Buyer Behavior," Journal of Consumer Research, Oxford University Press, vol. 2(3), pages 206-215, December.
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