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Networks of information exchange: Are link formation decisions strategic?

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  • Dev, Pritha

Abstract

This paper presents an empirical investigation into whether the decision to form a link with a node takes into account how well connected that node is. Given data in the form of a random sample from a network, this paper proposes a novel way to measure the degree of a node to adjust for mismeasurement and also controls for the endogeneity of this variable. It is shown that in fact the probability of forming a link with a node is increasing in the links received by that node but decreasing or unaffected by the links made by that node.

Suggested Citation

  • Dev, Pritha, 2018. "Networks of information exchange: Are link formation decisions strategic?," Economics Letters, Elsevier, vol. 162(C), pages 86-92.
    • Handle: RePEc:eee:ecolet:v:162:y:2018:i:c:p:86-92
    DOI: 10.1016/j.econlet.2017.10.020
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    References listed on IDEAS

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    Cited by:

    1. Giannikos, Christos I. & Kyei-Fordjour, Richmond, 2021. "Computing posterior signals and endogenous parameters in a dealer trading network," Economics Letters, Elsevier, vol. 207(C).

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    More about this item

    Keywords

    Network; Degree; Mismeasurement; Binary choice with endogeneity;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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