IDEAS home Printed from https://ideas.repec.org/a/eee/matsoc/v129y2024icp107-110.html
   My bibliography  Save this article

On the difficulty of characterizing network formation with endogenous behavior

Author

Listed:
  • Golub, Benjamin
  • Hsieh, Yu-Chi
  • Sadler, Evan

Abstract

Bolletta (2021) studies a model in which a network is strategically formed and then agents play a linear best-response investment game in it. The model is motivated by an application in which people choose both their study partners and their levels of educational effort. Agents have different one-dimensional types – private returns to effort. A main result claims that (pairwise Nash) stable networks have a locally complete structure consisting of possibly overlapping cliques: if two agents are linked, they are part of a clique composed of all agents with types between theirs. A counterexample shows that the claimed characterization is incorrect. We specify where the analysis errs and discuss implications for network formation models.

Suggested Citation

  • Golub, Benjamin & Hsieh, Yu-Chi & Sadler, Evan, 2024. "On the difficulty of characterizing network formation with endogenous behavior," Mathematical Social Sciences, Elsevier, vol. 129(C), pages 107-110.
    • Handle: RePEc:eee:matsoc:v:129:y:2024:i:c:p:107-110
    DOI: 10.1016/j.mathsocsci.2023.10.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165489623000884
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.mathsocsci.2023.10.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. Yann Bramoullé & Rachel Kranton, 2015. "Games Played on Networks," Working Papers halshs-01180657, HAL.
    2. Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
    3. Ugo Bolletta, 2021. "A model of peer effects in school," Post-Print hal-04442203, HAL.
    4. Anton Badev, 2021. "Nash Equilibria on (Un)Stable Networks," Econometrica, Econometric Society, vol. 89(3), pages 1179-1206, May.
    5. Hiller, Timo, 2017. "Peer effects in endogenous networks," Games and Economic Behavior, Elsevier, vol. 105(C), pages 349-367.
    6. , D. & Tessone, Claudio J. & ,, 2014. "Nestedness in networks: A theoretical model and some applications," Theoretical Economics, Econometric Society, vol. 9(3), September.
    7. Bolletta, Ugo, 2021. "A model of peer effects in school," Mathematical Social Sciences, Elsevier, vol. 114(C), pages 1-10.
    8. 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.
    9. Scott E. Carrell & Bruce I. Sacerdote & James E. West, 2013. "From Natural Variation to Optimal Policy? The Importance of Endogenous Peer Group Formation," Econometrica, Econometric Society, vol. 81(3), pages 855-882, May.
    Full references (including those not matched with items on IDEAS)

    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. Benjamin Golub & Yu-Chi Hsieh & Evan Sadler, 2023. "On the Difficulty of Characterizing Network Formation with Endogenous Behavior," Papers 2302.05831, arXiv.org, revised Feb 2023.
    2. Ushchev, Philip & Zenou, Yves, 2020. "Social norms in networks," Journal of Economic Theory, Elsevier, vol. 185(C).
    3. Anton Badev, 2021. "Nash Equilibria on (Un)Stable Networks," Econometrica, Econometric Society, vol. 89(3), pages 1179-1206, May.
    4. Bolletta, Ugo, 2021. "A model of peer effects in school," Mathematical Social Sciences, Elsevier, vol. 114(C), pages 1-10.
    5. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2017. "The Economic Consequences of Social-Network Structure," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 49-95, March.
    6. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 561-624, Elsevier.
    7. Zenou, Yves, 2014. "Key Players," CEPR Discussion Papers 10277, C.E.P.R. Discussion Papers.
    8. Yann Bramoullé & Habiba Djebbari & Bernard Fortin, 2020. "Peer Effects in Networks: A Survey," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 603-629, August.
    9. Nora, Vladyslav & Winter, Eyal, 2024. "Exploiting social influence in networks," Theoretical Economics, Econometric Society, vol. 19(1), January.
    10. Norma Olaizola & Federico Valenciano, 2020. "Dominance of weighted nested split graph networks in connections models," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(1), pages 75-96, March.
    11. Allouch, Nizar, 2017. "The cost of segregation in (social) networks," Games and Economic Behavior, Elsevier, vol. 106(C), pages 329-342.
    12. Péter Bayer & Ani Guerdjikova, 2020. "Optimism leads to optimality: Ambiguity in network formation," Working Papers hal-03005107, HAL.
    13. Yann Algan & Quoc-Anh Do & Nicolò Dalvit & Alexis Le Chapelain & Yves Zenou, 2015. "How Social Networks Shape Our Beliefs: A Natural Experiment among Future French Politicians," Working Papers hal-03459820, HAL.
    14. Chen, Ying-Ju & Zenou, Yves & Zhou, Junjie, 2022. "The impact of network topology and market structure on pricing," Journal of Economic Theory, Elsevier, vol. 204(C).
    15. repec:spo:wpmain:info:hdl:2441/78vacv4udu92eq3fec89svm9uv is not listed on IDEAS
    16. Harkins, Andrew, 2020. "Network Comparative Statics," The Warwick Economics Research Paper Series (TWERPS) 1306, University of Warwick, Department of Economics.
    17. Áureo de Paula, 2015. "Econometrics of network models," CeMMAP working papers CWP52/15, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    18. Battigalli, Pierpaolo & Panebianco, Fabrizio & Pin, Paolo, 2023. "Learning and selfconfirming equilibria in network games," Journal of Economic Theory, Elsevier, vol. 212(C).
    19. Liza Charroin & Bernard Fortin & Marie Claire Villeval, 2022. "Peer effects, self-selection and dishonesty," Post-Print hal-03712450, HAL.
    20. Cohen-Cole, Ethan & Patacchini, Eleonora & Zenou, Yves, 2015. "Static and dynamic networks in interbank markets," Network Science, Cambridge University Press, vol. 3(1), pages 98-123, March.
    21. Tatsi, Eirini, 2015. "Endogenous Social Interactions: Which Peers Matter?," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113168, Verein für Socialpolitik / German Economic Association.

    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:matsoc:v:129:y:2024:i:c:p:107-110. 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/inca/505565 .

    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.