Journal
ECONOMETRICA
Volume 86, Issue 1, Pages 263-288Publisher
WILEY
DOI: 10.3982/ECTA13564
Keywords
Network formation; pairwise stability; partial identification; large network
Categories
Funding
- NSF [SES-1123990]
- ERC [338187]
- Economic and Social Research Council through the ESRC Centre for Microdata Methods and Practice [RES-589-28-0001]
- ESRC [ES/P008909/1, ES/I034021/1, ES/M010147/1] Funding Source: UKRI
- European Research Council (ERC) [338187] Funding Source: European Research Council (ERC)
Ask authors/readers for more resources
This paper provides a framework for identifying preferences in a large network where links are pairwise stable. Network formation models present difficulties for identification, especially when links can be interdependent, for example, when indirect connections matter. We show how one can use the observed proportions of various local network structures to learn about the underlying preference parameters. The key assumption for our approach restricts individuals to have bounded degree in equilibrium, implying a finite number of payoff-relevant local structures. Our main result provides necessary conditions for parameters to belong to the identified set. We then develop a quadratic programming algorithm that can be used to construct this set. With further restrictions on preferences, we show that our conditions are also sufficient for pairwise stability and therefore characterize the identified set precisely. Overall, the use of both the economic model along with pairwise stability allows us to obtain effective dimension reduction.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available