IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v64y2007i3-4p369-390.html
   My bibliography  Save this article

Social networking and individual outcomes beyond the mean field case

Author

Listed:
  • Ioannides, Yannis M.
  • Soetevent, Adriaan R.

Abstract

We study individually optimized continuous outcomes in a dynamic environment in the presence of social interactions, and where the interaction topology may be either exogenous and time varying, or endogenous. The model accommodates more general social effects than those of the mean-field type. We address endogenous networking by assuming that each individual chooses the weights she attaches to the characteristics and the decisions of other agents. This amounts to choosing the elements of a row of a weighted adjacency matrix. Endogenous social networking thus involves simultaneity between decisions and patterns of directed social interactions.

Suggested Citation

  • Ioannides, Yannis M. & Soetevent, Adriaan R., 2007. "Social networking and individual outcomes beyond the mean field case," Journal of Economic Behavior & Organization, Elsevier, vol. 64(3-4), pages 369-390.
    • Handle: RePEc:eee:jeborg:v:64:y:2007:i:3-4:p:369-390
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(07)00134-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bisin, Alberto & Horst, Ulrich & Ozgur, Onur, 2006. "Rational expectations equilibria of economies with local interactions," Journal of Economic Theory, Elsevier, vol. 127(1), pages 74-116, March.
    2. Brock, William A. & Durlauf, Steven N., 2001. "Interactions-based models," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 54, pages 3297-3380, Elsevier.
    3. Shimshack, Jay P. & Ward, Michael B. & Beatty, Timothy K.M., 2007. "Mercury advisories: Information, education, and fish consumption," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 158-179, March.
    4. Gilbert Metcalf & Jongsang Park, 2007. "A comment on the role of prices for excludable public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(6), pages 685-698, December.
    5. Chih Ming Tan, 2010. "No one true path: uncovering the interplay between geography, institutions, and fractionalization in economic development," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(7), pages 1100-1127, November/.
    6. Jinill Kim & Sunghyun Kim, 2018. "Welfare Effects of Tax Policy in Open Economies: Stabilization and Cooperation," International Journal of Central Banking, International Journal of Central Banking, vol. 14(3), pages 347-376, June.
    7. Horst, Ulrich & Scheinkman, Jose A., 2006. "Equilibria in systems of social interactions," Journal of Economic Theory, Elsevier, vol. 130(1), pages 44-77, September.
    8. Eggleston, Karen & Wang, Jian & Rao, Keqin, 2008. "From plan to market in the health sector?: China's experience," Journal of Asian Economics, Elsevier, vol. 19(5-6), pages 400-412.
    9. Binder, Michael & Pesaran, M Hashem, 1998. "Decision Making in the Presence of Heterogeneous Information and Social Interactions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(4), pages 1027-1052, November.
    10. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818728, January.
    11. Darlene C. Chisholm & George Norman, 2006. "When to Exit a Product: Evidence from the U. S. Motion-Picture Exhibition Market," American Economic Review, American Economic Association, vol. 96(2), pages 57-61, May.
    12. Mathias Dewatripont & Lars Peter Hansen & Stephen Turnovsky, 2003. "Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress," ULB Institutional Repository 2013/176002, ULB -- Universite Libre de Bruxelles.
    13. Mitchel Y. Abolafia (ed.), 2005. "Markets," Books, Edward Elgar Publishing, number 2788.
    14. Gilbert E. Metcalf, 2005. "Tax Reform and Environmental Taxation," NBER Working Papers 11665, National Bureau of Economic Research, Inc.
    15. Henry Kim & Jinill Kim & Robert Kollmann, 2005. "Applying Perturbation Methods to Incomplete Market Models with Exogenous Borrowing Constraints," Discussion Papers Series, Department of Economics, Tufts University 0504, Department of Economics, Tufts University.
    16. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    17. Edward L. Glaeser & Bruce I. Sacerdote & Jose A. Scheinkman, 2003. "The Social Multiplier," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 345-353, 04/05.
    18. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2008. "Empirics of Growth and Development," Chapters, in: Amitava Krishna Dutt & Jaime Ros (ed.), International Handbook of Development Economics, Volumes 1 & 2, volume 0, chapter 3, Edward Elgar Publishing.
    19. Jinill Kim & Sunghyun Henry Kim & Ernst Schaumburg & Christopher A. Sims, 2003. "Calculating and using second order accurate solutions of discrete time dynamic equilibrium models," Finance and Economics Discussion Series 2003-61, Board of Governors of the Federal Reserve System (U.S.).
    20. Downes, Tom & Greenstein, Shane, 2007. "Understanding why universal service obligations may be unnecessary: The private development of local Internet access markets," Journal of Urban Economics, Elsevier, vol. 62(1), pages 2-26, July.
    21. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524131, January.
    22. Pollak, Robert A, 1976. "Interdependent Preferences," American Economic Review, American Economic Association, vol. 66(3), pages 309-320, June.
    23. Yannis Ioannides & Esteban Rossi-Hansberg, 2005. "Urban Growth," Discussion Papers Series, Department of Economics, Tufts University 0513, Department of Economics, Tufts University.
    24. Jeffrey E. Zabel & Robert W. Paterson, 2006. "The Effects of Critical Habitat Designation on Housing Supply: An Analysis of California Housing Construction Activity," Journal of Regional Science, Wiley Blackwell, vol. 46(1), pages 67-95, February.
    25. Henry Kim & Soyoung Kim & Yunjong Wang, 2005. "International Capital Flows and Boom-Bust Cycles in the Asia Pacific Region," Discussion Papers Series, Department of Economics, Tufts University 0506, Department of Economics, Tufts University.
    26. David K. Backus & Bryan R. Routledge & Stanley E. Zin, 2005. "Exotic Preferences for Macroeconomists," NBER Chapters, in: NBER Macroeconomics Annual 2004, Volume 19, pages 319-414, National Bureau of Economic Research, Inc.
    27. Peter M. DeMarzo & Dimitri Vayanos & Jeffrey Zwiebel, 2003. "Persuasion Bias, Social Influence, and Unidimensional Opinions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 909-968.
    28. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    29. Keely, Louise C. & Tan, Chih Ming, 2008. "Understanding preferences for income redistribution," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 944-961, June.
    30. Darlene Chisholm & Margaret McMillan & George Norman, 2010. "Product differentiation and film-programming choice: do first-run movie theatres show the same films?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(2), pages 131-145, May.
    31. Antoni Calvo-Armengol & Yannis M. Ioannides, 2005. "Social Networks in Labor Markets," Discussion Papers Series, Department of Economics, Tufts University 0517, Department of Economics, Tufts University.
    32. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818742, January.
    33. Soyoung Kim & Sunghyun H. Kim & Yunjong Wang, 2009. "Fear Of Floating In East Asia?," Pacific Economic Review, Wiley Blackwell, vol. 14(2), pages 176-193, May.
    34. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524117, January.
    35. Yannis M. Ioannides, 2005. "Random Graphs and Social Networks: An Economics Perspective," Discussion Papers Series, Department of Economics, Tufts University 0518, Department of Economics, Tufts University.
    36. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    37. Boyan Jovanovic, 1987. "Micro Shocks and Aggregate Risk," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 395-409.
    38. Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
    39. J.S. Eades, 2005. "East Asia," Chapters, in: James G. Carrier (ed.), A Handbook of Economic Anthropology, chapter 34, Edward Elgar Publishing.
    40. Reichlin, Lucrezia, 2002. "Factor Models in Large Cross-Sections of Time Series," CEPR Discussion Papers 3285, C.E.P.R. Discussion Papers.
    41. Roland Hodler & Kurt Schmidheiny, 2006. "How Fiscal Decentralization Flattens Progressive Taxes," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(2), pages 281-304, June.
    42. Binder, M. & Pesaran, H., 1996. "Multivariate Linear Rational Expectations Models: Characterisation of the Nature of the Solutions and Their Fully Recursive Computation," Cambridge Working Papers in Economics 9619, Faculty of Economics, University of Cambridge.
    43. Binder, Michael & Pesaran, M. Hashem, 1997. "Multivariate Linear Rational Expectations Models," Econometric Theory, Cambridge University Press, vol. 13(6), pages 877-888, December.
    44. Schmidheiny, Kurt, 2006. "Income segregation from local income taxation when households differ in both preferences and incomes," Regional Science and Urban Economics, Elsevier, vol. 36(2), pages 270-299, March.
    45. Binder, Michael & Pesaran, M. Hashem, 2001. "Life-cycle consumption under social interactions," Journal of Economic Dynamics and Control, Elsevier, vol. 25(1-2), pages 35-83, January.
    46. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2005. "How Robust Are the Linkages Between Religiosity and Economic Growth," Discussion Papers Series, Department of Economics, Tufts University 0510, Department of Economics, Tufts University.
    47. David M. G. Newbery & Joseph E. Stiglitz, 1984. "Pareto Inferior Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(1), pages 1-12.
    48. Durlauf, Steven N., 2004. "Neighborhood effects," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 50, pages 2173-2242, Elsevier.
    49. Jackson, Matthew O. & Watts, Alison, 2002. "The Evolution of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 106(2), pages 265-295, October.
    50. Louise C. Keely & Chih Ming Tan, 2005. "Understanding Divergent Views on Redistribution Policy in the United States," Discussion Papers Series, Department of Economics, Tufts University 0515, Department of Economics, Tufts University.
    51. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818735, January.
    52. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524124, January.
    53. Jay Shimshack, 2004. "Are Mercury Advisories Effective? Inofrmation, Education, and Fish Consumption," Discussion Papers Series, Department of Economics, Tufts University 0423, Department of Economics, Tufts University.
    54. Mathias Dewatripont & Lars Peter Hansen & Stephen Turnovsky, 2003. "Advances in economics and econometrics :theory and applications," ULB Institutional Repository 2013/9557, ULB -- Universite Libre de Bruxelles.
    55. J. V. Henderson & J. F. Thisse (ed.), 2004. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 4, number 4.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yannis M. Ioannides, 2005. "Random Graphs and Social Networks: An Economics Perspective," Discussion Papers Series, Department of Economics, Tufts University 0518, Department of Economics, Tufts University.
    2. Bramoullé, Yann & Djebbari, Habiba & Fortin, Bernard, 2009. "Identification of peer effects through social networks," Journal of Econometrics, Elsevier, vol. 150(1), pages 41-55, May.
    3. Cabrales, Antonio & Calvó-Armengol, Antoni & Zenou, Yves, 2011. "Social interactions and spillovers," Games and Economic Behavior, Elsevier, vol. 72(2), pages 339-360, June.
    4. Yannis M. Ioannides, 2022. "Endogenous Social Networks And Inequality In An Intergenerational Setting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1691-1715, November.
    5. Grajzl, Peter & Baniak, Andrzej, 2012. "Mandating behavioral conformity in social groups with conformist members," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 479-493.
    6. Darlene Chisholm & Margaret McMillan & George Norman, 2010. "Product differentiation and film-programming choice: do first-run movie theatres show the same films?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(2), pages 131-145, May.
    7. Horst, Ulrich, 2010. "Dynamic systems of social interactions," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 158-170, February.
    8. Gilbert Metcalf & Jongsang Park, 2007. "A comment on the role of prices for excludable public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(6), pages 685-698, December.
    9. Liu, Jin-Hu & Wang, Jun & Shao, Junming & Zhou, Tao, 2016. "Online social activity reflects economic status," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 457(C), pages 581-589.
    10. Darlene C. Chisholm & George Norman, 2006. "When to Exit a Product: Evidence from the U. S. Motion-Picture Exhibition Market," American Economic Review, American Economic Association, vol. 96(2), pages 57-61, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Darlene Chisholm & Margaret McMillan & George Norman, 2010. "Product differentiation and film-programming choice: do first-run movie theatres show the same films?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(2), pages 131-145, May.
    2. Gilbert Metcalf & Jongsang Park, 2007. "A comment on the role of prices for excludable public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(6), pages 685-698, December.
    3. Darlene C. Chisholm & George Norman, 2006. "When to Exit a Product: Evidence from the U. S. Motion-Picture Exhibition Market," American Economic Review, American Economic Association, vol. 96(2), pages 57-61, May.
    4. ÖZGÜR, Onur & BISIN, Alberto, 2011. "Dynamic Linear Economies with Social Interactions," Cahiers de recherche 04-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    5. Antoni Calvo-Armengol & Yannis M. Ioannides, 2005. "Social Networks in Labor Markets," Discussion Papers Series, Department of Economics, Tufts University 0517, Department of Economics, Tufts University.
    6. Mari Rege & Kjetil Telle & Mark Votruba, 2012. "Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1208-1239, December.
    7. Pekka S��skilahti, 2015. "Monopoly Pricing of Social Goods," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 22(3), pages 429-448, November.
    8. Tolciu, Andreia, 2008. "Is unemployment a consequence of social interactions? Seeking for a common research framework for economists and other social scientists," HWWI Research Papers 1-15, Hamburg Institute of International Economics (HWWI).
    9. Evstigneev, Igor & Taksar, Michael, 2009. "Dynamic interaction models of economic equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 33(1), pages 166-182, January.
    10. Karim Barhoumi & Olivier Darné & Laurent Ferrara, 2010. "Are disaggregate data useful for factor analysis in forecasting French GDP?," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 29(1-2), pages 132-144.
    11. Onatski, Alexei, 2012. "Asymptotics of the principal components estimator of large factor models with weakly influential factors," Journal of Econometrics, Elsevier, vol. 168(2), pages 244-258.
    12. Rodrigo Harrison & Roberto Muñoz, 2008. "Stability and equilibrium selection in a link formation game," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 37(2), pages 335-345, November.
    13. Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves, 2014. "Endogenous peer effects: local aggregate or local average?," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 39-59.
    14. Christian Hellwig, 2004. "Heterogeneous Information and the Benefits of Public Information Disclosures (October 2005)," UCLA Economics Online Papers 283, UCLA Department of Economics.
    15. Christoph Breunig, 2019. "Goodness-of-Fit Tests based on Series Estimators in Nonparametric Instrumental Regression," Papers 1909.10133, arXiv.org.
    16. Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Leniency policies and illegal transactions," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1281-1297, August.
    17. Yoo, Seung Han, 2014. "Learning a population distribution," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 188-201.
    18. Chassang, Sylvain, 2008. "Uniform selection in global games," Journal of Economic Theory, Elsevier, vol. 139(1), pages 222-241, March.
    19. Kasahara, Tetsuya, 2009. "Coordination failure among multiple lenders and the role and effects of public policy," Journal of Financial Stability, Elsevier, vol. 5(2), pages 183-198, June.
    20. Stolpe, Michael, 2004. "Europe's entry into the venture capital business: efficiency and policy," Kiel Working Papers 1223, Kiel Institute for the World Economy (IfW Kiel).

    More about this item

    Keywords

    Social interactions Social networks Neighborhood effects Endogenous networking Social intermediation Econometric identification Strong versus weak ties Value of social connections;

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • J0 - Labor and Demographic Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:64:y:2007:i:3-4:p:369-390. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.