IDEAS home Printed from https://ideas.repec.org/p/bri/uobdis/12-633.html
   My bibliography  Save this paper

Peer Effects in Endogenous Networks

Author

Listed:
  • Timo Hiller

Abstract

This paper presents a simple model of strategic network formation with local complementarities in effort levels and positive local externalities. Equilibrium networks display - other than the complete and the empty network - a core-periphery structure, which is commonly observed in empirical studies. Ex-ante homogenous agents may obtain very different ex-post outcomes. These findings are relevant for a wide range of social and economic phenomena, such as educational attainment, criminal activity, labor market participation and R&D expenditures of firms.

Suggested Citation

  • Timo Hiller, 2012. "Peer Effects in Endogenous Networks," Bristol Economics Discussion Papers 12/633, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:12/633
    as

    Download full text from publisher

    File URL: http://www.bristol.ac.uk/efm/media/workingpapers/working_papers/pdffiles/dp12633.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Calvó-Armengol, Antoni & Patacchini, Eleonora & Zenou, Yves, 2005. "Peer Effects and Social Networks in Education and Crime," Working Paper Series 645, Research Institute of Industrial Economics.
    2. Antoni Calvó-Armengol & Rahmi İlkılıç, 2009. "Pairwise-stability and Nash equilibria in network formation," International Journal of Game Theory, Springer;Game Theory Society, vol. 38(1), pages 51-79, March.
    3. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    4. Paul Belleflamme & Francis Bloch, 2004. "Market sharing agreements and collusive networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 387-411, May.
    5. Antoni Calvó-Armengol & Eleonora Patacchini & Yves Zenou, 2009. "Peer Effects and Social Networks in Education," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1239-1267.
    6. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    7. Anne C. Case & Lawrence F. Katz, 1991. "The Company You Keep: The Effects of Family and Neighborhood on Disadvantaged Youths," NBER Working Papers 3705, National Bureau of Economic Research, Inc.
    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. Hiller, Timo, 2017. "Peer effects in endogenous networks," Games and Economic Behavior, Elsevier, vol. 105(C), pages 349-367.
    2. repec:cep:stitep:/2013/564 is not listed on IDEAS
    3. Timo Hiller & Timo Hiller, 2013. "Peer Effects in Endogenous Networks," STICERD - Theoretical Economics Paper Series 564, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    4. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2010. "Delinquent Networks," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 34-61, March.
    5. ,, 2015. "Social activity and network formation," Theoretical Economics, Econometric Society, vol. 10(2), May.
    6. Hiller, Timo, 2013. "Peer effects in endogenous networks," LSE Research Online Documents on Economics 58176, London School of Economics and Political Science, LSE Library.
    7. Liu, Xiaodong & Patacchini, Eleonora & Zenou, Yves & Lee, Lung-Fei, 2011. "Criminal Networks: Who is the Key Player?," Research Papers in Economics 2011:7, Stockholm University, Department of Economics.
    8. Paolo Buonanno & Daniel Montolio & Paolo Vanin, 2009. "Does Social Capital Reduce Crime?," Journal of Law and Economics, University of Chicago Press, vol. 52(1), pages 145-170, February.
    9. Gibbons, Steve & Overman, Henry G. & Patacchini, Eleonora, 2015. "Spatial Methods," 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 115-168, Elsevier.
    10. de Marti, Joan & Zenou, Yves, 2009. "Social Networks," Working Paper Series 816, Research Institute of Industrial Economics.
    11. Zenou, Yves & Patacchini, Eleonora, 2007. "Ethnicity and Spatial Externalities in Crime," CEPR Discussion Papers 6130, C.E.P.R. Discussion Papers.
    12. Jackson, Matthew O. & Zenou, Yves, 2015. "Games on Networks," Handbook of Game Theory with Economic Applications,, Elsevier.
    13. Hellmann, Tim & Staudigl, Mathias, 2014. "Evolution of social networks," European Journal of Operational Research, Elsevier, vol. 234(3), pages 583-596.
    14. Eleonora Patacchini & Yves Zenou, 2012. "Juvenile Delinquency and Conformism," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(1), pages 1-31.
    15. Zhao Chen & Shiqing Jiang & Ming Lu & Hiroshi Sato, 2008. "How Do Heterogeneous Social Interactions Affect the Peer Effect in Rural-Urban Migration?: Empirical Evidence from China," Global COE Hi-Stat Discussion Paper Series gd08-008, Institute of Economic Research, Hitotsubashi University.
    16. Zenou, Yves, 2005. "Crime, Location and the Housing Market," Working Paper Series 651, Research Institute of Industrial Economics.
    17. Patacchini, Eleonora & Zenou, Yves, 2008. "The strength of weak ties in crime," European Economic Review, Elsevier, vol. 52(2), pages 209-236, February.
    18. König, Michael D. & Battiston, Stefano & Napoletano, Mauro & Schweitzer, Frank, 2012. "The efficiency and stability of R&D networks," Games and Economic Behavior, Elsevier, vol. 75(2), pages 694-713.
    19. Zenou, Yves & Patacchini, Eleonora, 2005. "Crime and Conformism," CEPR Discussion Papers 5331, C.E.P.R. Discussion Papers.
    20. Marco Battaglini & Eleonora Patacchini & Edoardo Rainone, 2019. "Endogenous Social Connections in Legislatures," NBER Working Papers 25988, National Bureau of Economic Research, Inc.
    21. Hugh-Jones, David & Ooi, Jinnie, 2023. "Where do fairness preferences come from? Norm transmission in a teen friendship network," European Economic Review, Elsevier, vol. 157(C).

    More about this item

    Keywords

    Network formation; peer effects; strategic complements; positive externalities;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:bri:uobdis:12/633. 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: Vicky Jackson (email available below). General contact details of provider: https://edirc.repec.org/data/sebriuk.html .

    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.