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on Network Economics |
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Issue of 2017‒01‒08
five papers chosen by Pedro CL Souza Pontifícia Universidade Católica do Rio de Janeiro |
| By: | Ilse Lindenlaub (Yale University); Anja Prummer (Queen Mary University of London) |
| Abstract: | This paper documents gender differences in social ties and develops a theory that links them to disparities in men's and women's labor market performance. Men's networks lead to better access to information, women's to higher peer pressure. Both affect effort in a model of teams, each beneficial in different environments. We find that information is particularly valuable under high uncertainty, whereas peer pressure is more valuable in the opposite case. We therefore expect men to outperform women in jobs that are characterized by high earnings uncertainty, such as the financial sector or film industry - in line with the evidence. |
| Keywords: | Networks, Peer pressure, Gender, Labor market outcomes |
| JEL: | J15 Z10 D02 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp807&r=net |
| By: | Thomas Groll (Columbia University); Anja Prummer (Queen Mary University of London) |
| Abstract: | We study lobbying in a setting in which decision-makers share resources in a network. Two opposing interest groups choose which decision-maker they want to target with their resource provision, and their decision depends on the decision-makers' ideologies as well as the network structure. We characterize the lobbying strategies in various network settings and show that a higher resource flow as well as homophily reinforce decision-makers' ideological bias. We highlight that competing lobbyists' efforts do not neutralize each other and their payoffs and competitive advantages depend on the networks they face. Our findings are consistent with empirically established lobbying activities. |
| Keywords: | Networks, Lobbying, Targeting, Flow of resources, Ideology, Centrality, Homophily, Colonel Blotto, Externalities |
| JEL: | D72 D78 D83 D85 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp808&r=net |
| By: | Bloch, Francis (Université Paris 1 and Paris School of Economics); Dutta, Bhaskar (University of Warwick and Ashoka University); Robin, Stéphane (Université de Lyon); Zhu, Min (Beijing Normal University) |
| Abstract: | This paper analyzes the formation of partnerships in social networks. Agents randomly request favors and turn to their neighbors to form a partnership. If favors are costly, agents have an incentive to delay the formation of the partnership. In that case, for any initial social network, the unique Markov Perfect equilibrium results in the formation of the maximum number of partnerships when players become infinitely patient. If favors provide benefits, agents rush to form partnerships at the cost of disconnecting other agents and the only perfect initial networks for which the maximum number of partnerships are formed are the complete and complete bipartite networks. The theoretical model is tested in the lab. Subjects generally play according to their equilibrium strategy and the efficient outcome is obtained over 78% of the times. Decisions are affected by the complexity of the network. Two behavioral rules are observed during the experiment: subjects accept the formation of the partnership too often and reject partnership offers when one of their neighbors is only connected to them. |
| Keywords: | social networks ; partnerships ; matchings in networks ; non-stationary networks ; laboratory experiments JEL classification numbers: D85 ; C78 ; C91 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wcreta:27&r=net |
| By: | Jing Cai; Adam Szeidl |
| Abstract: | We organized business associations for the owner-managers of randomly selected young Chinese firms to study the effect of business networks on firm performance. We randomized 2,800 firms into small groups whose managers held monthly meetings for one year, and into a “no- meetings” control group. We find that: (1) The meetings increased firm revenue by 8.1 percent, and also significantly increased profit, factors, inputs, the number of partners, borrowing, and a management score; (2) These effects persisted one year after the conclusion of the meetings; and (3) Firms randomized to have better peers exhibited higher growth. We exploit additional interventions to document concrete channels. (4) Managers shared exogenous business-relevant information, particularly when they were not competitors, showing that the meetings facilitated learning from peers. (5) Managers created more business partnerships in the regular than in other one-time meetings, showing that the meetings improved supplier-client matching. (6) Firms whose managers discussed management, partners, or finance improved more in the associated domain, suggesting that the content of conversations shaped the nature of gains. |
| JEL: | D22 L14 O12 O14 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22951&r=net |
| By: | Tumen, Semih (Central Bank of Turkey) |
| Abstract: | This paper argues that the structure (i.e., size and composition) of the informal search network is a crucial determinant of the career decisions of young workers. Building on the search-theoretic career choice and job mobility model proposed by Neal (1999), I compare the consequences of career advice by one's weak ties versus that by strong ties. The main result is that receiving help from weak ties is associated with early career and job settlements, while the strong ties are more likely to lead to amplified mobility and generate mismatch. Given a network size, I find a strongly positive correlation between the fraction of weak ties among one's informal connections and the likelihood of settling on a stable career path early in the life course. I also find that the sign of this correlation persists, while the magnitude gets smaller as the network size increases. I conclude that the strength-of-weak-ties hypothesis can shed light on the complexity of job mobility patterns among young workers. The model can explain why it takes much longer for blacks – whose informal networks are documented to consist of strong ties – to locate a stable career path than their white counterparts. It also predicts that young workers from closed and segregated neighborhoods tend to spend more time before they find suitable careers. |
| Keywords: | job mobility, career choice, search, strength of weak ties, social networks |
| JEL: | J21 J24 J62 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10401&r=net |