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on Network Economics |
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Issue of 2019‒05‒20
three papers chosen by Pedro CL Souza Pontifícia Universidade Católica do Rio de Janeiro |
| By: | List, John; Momeni, Fatemeh; Zenou, Yves |
| Abstract: | We estimate the direct and spillover effects of a large-scale early childhood intervention on the educational attainment of over 2,000 disadvantaged children in the United States. We show that failing to account for spillover effects results in a severe underestimation of the impact. The intervention induced positive direct effects on test scores of children assigned to the treatment groups. We document large spillover effects on both treatment and control children who live near treated children. On average, spillover effects increase a child's non-cognitive (cognitive) scores by about 1.2 (0.6 to 0.7) standard deviations. The spillover effects are localized, decreasing with the spatial distance to treated neighbors. Our evidence suggests the spillover effect on non-cognitive scores are likely to operate through the child's social network. Alternatively, parental investment is an important channel through which cognitive spillover effects operate. We view our results as speaking to several literatures, perhaps most importantly the role of public programs and neighborhoods on human capital formation at an early age. |
| Keywords: | early education; field experiment; neighborhood; non-cognitive skills; spillover effects |
| JEL: | C93 I21 R1 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13725&r=all |
| By: | Egorov, Georgy; Sonin, Konstantin |
| Abstract: | We analyze persuasion in a model, in which each receiver (of many) might buy a direct access to the sender's signal or to rely on her network connections to get the same information. For the sender, a more biased signal increases the impact per subscriber (direct receiver), yet diminishes the willingness of agents to become subscribers. Contrary to the naive intuition, the optimal propaganda might target peripheral, rather than centrally located agents, and is at its maximum level when the probability that information flows between agents is either zero, or nearly one, but not in-between. The density of the network has a non-monotonic effect on the optimal level of propaganda as well. |
| Keywords: | Bayesian persuasion; networks; percolation; Propaganda |
| JEL: | D85 L82 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13723&r=all |
| By: | Renaud Bourlès (Aix-Marseille School of Economics (CNRS / AMU / EHESS) (AMSE)); Yann Bramoullé (Aix-Marseille School of Economics (CNRS / AMU / EHESS)); Eduardo Perez (Département d'économie) |
| Abstract: | We provide the first analysis of the risk-sharing implications of altruism networks. Agents are embedded in a fixed network and care about each other. We study whether altruistic transfers help smooth consumption and how this depends on the shape of the network. We identify two benchmarks where altruism networks generate efficient insurance: for any shock when the network of perfect altruism is strongly connected and for any small shock when the network of transfers is weakly connected. We show that the extent of informal insurance depends on the average path length of the altruism network and that small shocks are partially insured by endogenous risk-sharing communities. We uncover complex structural effects. Under iid incomes, central agents tend to be better insured, the consumption correlation between two agents is positive and tends to decrease with network distance, and a new link can decrease or increase the consumption variance of indirect neighbors. Overall, we show that altruism in networks has a first-order impact on risk and generates specific patterns of consumption smoothing. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/cpem82ltk8fgprl50i20pgomf&r=all |