|
on Network Economics |
| By: | Andre Groeger; Yanos Zylberberg |
| Abstract: | This paper studies how social networks (might fail to) shape agricultural practices. We exploit (i) a unique census of agricultural production nested within delineated land parcels and (ii) social network data within four repopulated villages of rural Vietnam. In a first step, we extract exogenous variation in network formation from home locations within the few streets that compose each village (populated through staggered population resettlement), and we estimate the return to social links in the adoption of highly-productive crops. We find a large network multiplier, in apparent contradiction with low adoption rates. In a second step, we study the structure of network formation to explain this puzzle: social networks display large homophily, and valuable links between heterogeneous households are rare. Due to the clustered nature of networks and the dynamic, endogenous propagation of agricultural practices, there are decreasing returns to social links, and policies targeting “inbetweeners†are most able to mitigate this issue. |
| Date: | 2025–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:25/794 |
| By: | Arthur Charpentier |
| Abstract: | The usual definitions of algorithmic fairness focus on population-level statistics, such as demographic parity or equal opportunity. However, in many social or economic contexts, fairness is not perceived globally, but locally, through an individual's peer network and comparisons. We propose a theoretical model of perceived fairness networks, in which each individual's sense of discrimination depends on the local topology of interactions. We show that even if a decision rule satisfies standard criteria of fairness, perceived discrimination can persist or even increase in the presence of homophily or assortative mixing. We propose a formalism for the concept of fairness perception, linking network structure, local observation, and social perception. Analytical and simulation results highlight how network topology affects the divergence between objective fairness and perceived fairness, with implications for algorithmic governance and applications in finance and collaborative insurance. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.12028 |
| By: | Boris Ginzburg |
| Abstract: | This paper models voters who invest effort to determine whether a particular claim relevant to their voting choices is correct. If a voter succeeds in determining whether the claim is correct, this information is shared via a social network. I show that increased connectivity makes voters more informed about basic facts, but less informed about complicated issues. At the same time, polarization makes voters less informed overall. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.15454 |
| By: | Bo Cowgill (Columbia Business School, Columbia University, New York, NY, USA); Zikai Xu (Department of Economics, Columbia University, New York, NY, USA) |
| Abstract: | This paper develops a mechanism design approach to network formation. A principal has a willingness-to-pay (WTP) for different network configurations while agents have preferences over their network positions. Our approach allows the principal to optimize for global properties of the network, while respecting IC/IR constraints of network participants. We focus on direct mechanisms but develop a broader family of mechanisms in which transfers are set by the allocation rule ("revenue equivalence"). We characterize optimal mechanisms under novel multidimensional regularity conditions and provide an ironing procedure for irregular distributions. These findings contribute to multidimensional mechanism design, with potential applications to network formation in social, economic, and organizational contexts. |
| Keywords: | mechanism design; virtual values; network formation |
| JEL: | D85 L14 D44 D82 D86 D2 M5 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2501 |
| By: | Robert Petrunia (Lakehead University) |
| Abstract: | This presentation extends the literature on firm dynamics by incorporating ownership networks and financing in the study of firm growth. I observe co-ownership connections for the universe of privately owned Ecuadorian manufacturing firms between 2000 and 2019. The structure of my data allows to construct ownership network variables and determine their impact on firm growth in a quantile fixed-effect dynamic regression framework. This approach uncovers the heterogeneous impact of firm age on firm growth across the entire conditional firm-growth distributions and statistically significant leverage and network effects. The relationship between firm growth and leverage remains positive with the inclusion of ownership networks. For young firms, the results indicate that there is no significant relationship between age and growth. This result suggests that financial variables continue to matter and that ownership networks capture alternative aspects of firm dynamics that have not been previously acknowledged. |
| Date: | 2025–10–05 |
| URL: | https://d.repec.org/n?u=RePEc:boc:cand25:02 |
| By: | Jose M. Betancourt |
| Abstract: | I study dynamic network formation games in which agents assign arbitrary values to network structures. Any such game admits an equivalent representation in terms of the values agents assign to its sub-structures, linking local valuations to equilibrium behavior. The game is a potential game precisely when all participants in a structure value it equally, yielding a closed-form stationary distribution. When valuations are restricted to a finite set of repeated sub-structures, or motifs, the model exhibits phase transitions: small changes in motif values cause discontinuous shifts in network density. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.10997 |
| By: | Claudia Cerrone; Francesco Feri; Anita Gantner; Paolo Pin |
| Abstract: | This paper investigates whether the decoy effect - specifically the attraction effect - can foster cooperation in social networks. In a lab experiment, we show that introducing a dominated option increases the selection of the target choice, especially in early decisions. The effect is stronger in individual settings but persists in networks despite free-riding incentives, with variation depending on the decision-maker's strategic position. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.13887 |