nep-net New Economics Papers
on Network Economics
Issue of 2018‒11‒19
six papers chosen by
Pedro CL Souza
Pontifícia Universidade Católica do Rio de Janeiro

  1. Social Norms in Networks By Ushchev, Philip; Zenou, Yves
  2. Time-Use and Academic Peer Effects in College By Nirav Mehta; Todd Stinebrickner; Ralph Stinebrickner
  3. Friendship and Female Education: Evidence from a Field Experiment in Bangladeshi Primary Schools By Hahn, Youjin; Islam, Asadul; Patacchini, Eleonora; Zenou, Yves
  4. The network origins of the gains from trade By Bosker, Maarten; Westbrock, Bastian
  5. Learning Spillovers in Conditional Welfare Programs: Evidence from Brazil By Fernanda Brollo; Katja Maria Kaufmann; Eliana La Ferrara
  6. Selection in the Lab: A Network Approach By Aleksandr Alekseev; Mikhail Freer

  1. By: Ushchev, Philip; Zenou, Yves
    Abstract: Although the linear-in-means model is the workhorse model in empirical work on peer effects, its theoretical properties are understudied. In this paper, we investigate how social norms affect individual effort, aggregate Although the linear-in-means model is the workhorse model in empirical work on effort, and welfare. While individual productivity always positively affects own effort and utility, we show that taste for conformity has an ambiguous effect on individual outcomes and depends on whether an individual is above or below her own social norm. Equilibria are usually inefficient and, to restore the first best, the planner subsidizes (taxes) agents whose neighbors make efforts above (below) the social norms in equilibrium. Thus, provision of more subsidies to more central agents is not necessarily efficient.
    Keywords: networks; Social norms; welfare
    JEL: D85 J15 Z13
    Date: 2018–10
  2. By: Nirav Mehta (University of Western Ontario); Todd Stinebrickner (Western University); Ralph Stinebrickner (University of Western Ontario)
    Abstract: This paper examines academic peer effects in college. Unique new data from the Berea Panel Study allow us to focus on a mechanism wherein a student’s peers affect her achievement by changing her study effort. Although the potential relevance of this mechanism has been recognized, data limitations have made it difficult to provide direct evidence about its importance. We find that a student’s freshman grade point average is affected by the amount her peers studied in high school, suggesting the importance of this mechanism. Using time diary information, we confirm that college study time is actually being affected.
    Keywords: peer effects, time use, higher education, mechanisms
    JEL: I00 I21 I23 J22
    Date: 2018–11
  3. By: Hahn, Youjin; Islam, Asadul; Patacchini, Eleonora; Zenou, Yves
    Abstract: We randomly assigned 150 primary schools in Bangladesh to one of three settings: children studying individually, children studying in groups with friends, and children studying in groups with peers. The groups consisted of four people with similar average cognitive abilities and household characteristics. While the achievement of male students was not affected by the group assignment, low-ability females in groups with friends outperformed low-ability females working with peers by roughly 0.4 standard deviations of the test score distribution. This is shown not to be due to the fact that friends tend to be of the same gender or to a higher frequency of interactions among friends.
    Keywords: education; Gender; learning; Social interactions
    JEL: I25 J16 O12
    Date: 2018–10
  4. By: Bosker, Maarten; Westbrock, Bastian
    Abstract: This paper argues that the determinants of the welfare gains from trade have fundamentally changed with the emergence of a global production network. Towards this end, we study a Ricardian trade model featuring trade in intermediate inputs, and develop a novel comparative statics approach to decompose the total welfare effect of an arbitrary trade cost shock into several meaningful, easily quantifiable, channels. This decomposition uncovers a unique feature of supply chain trade: the gains from trade are not so much determined by a country's access to the technologies and markets of its direct trade partners, but rather by a country's network exposure to countries further up- or downstream in the global production network. We develop a set of simple statistics to measure each country's network exposure, show how it predicts the gains from trade, and identify each country's key trade intermediaries, i.e., countries that primarily determine its network exposure.
    Keywords: Gains from trade; global production network; network diffusion; network exposure; Supply Chains; trade intermediation
    JEL: F10 F11
    Date: 2018–10
  5. By: Fernanda Brollo; Katja Maria Kaufmann; Eliana La Ferrara
    Abstract: We study spillovers in learning about the enforcement of Bolsa Familia, a program conditioning benefits on children’s school attendance. Using original administrative data, we find that individuals’ compliance responds to penalties incurred by their classmates and by siblings’ classmates (in other grades/schools). As the severity of penalties increases with repeated noncompliance, the response is larger when peers are punished for “higher stages†than the family’s, consistent with learning. Individuals also respond to penalties experienced by neighbors who are exogenously scheduled to receive notices on the same day. Our results point to important social multiplier effects of enforcement via learning.
    Date: 2018–11
  6. By: Aleksandr Alekseev (Economic Science Institute, Chapman University); Mikhail Freer (ECARES, Université libre de Bruxelles)
    Abstract: We study the selection problem in economic experiments by focusing on its dynamic and network aspects. We develop a dynamic network model of student participation in a subject pool, which assumes that students’ participation is driven by the two channels: the direct channel of recruitment and the indirect channel of student interaction. Using rich recruitment data from a large public university, we find that the patterns of participation and biases are consistent with the model. We also find evidence of both short- and long-run selection biases between males and females, as well as between cohorts of students. Males tend to have higher participation rates than females, and participation rates tend to decrease with a cohort’s age. Our empirical findings confirm that dynamic and peer effects play an important role in shaping the selection problem. Our model allows us to reconcile some of the mixed results in previous studies.
    Keywords: selection problem, laboratory experiments, external validity, networks, diffusion, peer effects
    JEL: C32 C90 D85
    Date: 2018

This nep-net issue is ©2018 by Pedro CL Souza. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.