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on Network Economics |
| By: | Lindquist, Matthew J. (SOFI, Stockholm University); Patacchini, Eleonora (Cornell University); Vlassopoulos, Michael (University of Southampton); Zenou, Yves (Monash University) |
| Abstract: | We study spillover effects within co-offending networks by leveraging deaths of co-offenders for causal identification. Our results demonstrate that the death of a co-offender significantly reduces the criminal activities of other network members. We observe a decaying pattern in the magnitude of these spillover effects: individuals directly linked to a deceased offender experience the most significant impact, followed by those two steps away, and then those three steps away. Moreover, we find that the death of a more central co-offender leads to a larger reduction in aggregate crime. We also provide evidence consistent with a new theoretical prediction suggesting that the loss of a co-offender shrinks the future information set of offenders, altering their perceptions of the probability of being convicted and consequently affecting their criminal behavior. Our findings highlight the importance of understanding spillover effects for policymakers seeking to develop more effective strategies for crime prevention. |
| Keywords: | networks, crime, key players, exogenous deaths, spillovers |
| JEL: | A14 D85 K42 Z13 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17113&r= |
| By: | Marc Claveria-Mayol; Pau Mil\'an; Nicol\'as Oviedo-D\'avila |
| Abstract: | Risk-averse workers in a team exert effort to produce joint output. Workers' incentives are connected via chains of productivity spillovers, represented by a network of peer-effects. We study the problem of a principal offering wage contracts that simultaneously incentivize and insure agents. We solve for the optimal linear contract for any network and show that optimal incentives are loaded more heavily on workers that are more central in a specific way. We conveniently link firm profits to network structure via the networks spectral properties. When firms can't personalize contracts, better connected workers extract rents. In this case, a group composition result follows: large within-group differences in centrality can decrease firm's profits. Finally, we find that modular production has important implications for how peer structures distribute incentives. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.11712&r= |
| By: | Christian Ghiglino; Nicole Tabasso |
| Abstract: | Interaction with individuals from other socioeconomic classes has been shown to be a main driver for social mobility. We employ tools of social identity theory and network analysis to show how exposure to individuals of different social identities can lead to interactions with them, and an adoption of their identity, creating social mobility. We find that even if all individuals have the same ability, they may endogenously choose different identities, leading to different classes and actions. In particular, we derive a sufficient condition for such an equilibrium to exist, which equates to a novel measure of cohesion. Furthermore, we show that the most socially mobile individuals (changing their identity) are those who either have few connections or a more heterogeneous mix of identities in their connections. Finally, we show that upward social mobility increases action levels in society, but not necessarily welfare. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.10972&r= |
| By: | Berliant, Marcus |
| Abstract: | We examine the fine microstructure of commuting in a game-theoretic setting with a continuum of commuters. Commuters' home and work locations can be heterogeneous. A commuter transport network is exogenous. Traffic speed is determined by link capacity and by local congestion at a time and place along a link, where local congestion at a time and place is endogenous. The model can be reinterpreted to apply to congestion on the internet. We find sufficient conditions for existence of equilibrium, that multiple equilibria are ubiquitous, and that the welfare properties of morning and evening commute equilibria differ on a generalization of a directed tree. |
| Keywords: | Commuting; Internet traffic; Congestion externality; Efficient Nash equilibrium; Price of anarchy |
| JEL: | L86 R41 |
| Date: | 2024–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121330&r= |
| By: | QIN, Abby Youran; Dubree, Wil; Wagner, Michael W. |
| Abstract: | Political homophily has been extensively examined as an individual tendency, but we know little about the social, cultural, and economic conditions that foster homophilic connections. We offer a contextual explanation of political homophily and shed light on spatial polarization from a social-communication network perspective by combining GLMNet models, spatial lag regressions, and geographically weighted regressions to examine various ecological factors’ roles in the political homophily observable in county-level physical mobility and Facebook friendship networks. Overall, our analyses suggest that urban culture characterized by large population, robust local news provision, racial-ethnic diversity, and progressive political culture tend to foster politically inclusive connections. More specifically, the proportion of Democrats is strongly associated with more cross-cutting connections, both online and offline. While population size is associated with lower offline homophily, racial-national diversity and local news availability play more important roles in lowering online homophily. Geographical contexts matter in the way people socialize with one another, even in the era of internet and social media. |
| Date: | 2024–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:3yg8q&r= |
| By: | Victor Aguirregabiria; Robert Clark; Hui Wang |
| Abstract: | Geographic dispersion of depositors, borrowers, and banks may prevent funding from flowing to high loan demand areas, limiting credit access. Using bank-county-year level data, we provide evidence of the geographic imbalance of deposits and loans and develop a methodology for investigating the contribution to this imbalance of branch networks, market power, and scope economies. Results are based on a novel measure of imbalance and estimation of a structural model of bank competition that admits interconnections across locations and between deposit and loan markets. Counterfactual experiments show branch networks and competition contribute importantly to credit flow but benefit more affluent markets. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.03517&r= |