S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Department of Economics, Stockholm University Research Papers in Economics, Department of Economics, Stockholm University

No 2010:20:
Social Interactions and Spillovers

Antonio Cabrales (), Antoni Calvˇ-Armengol and Yves Zenou ()

Abstract: The aim of this paper is to provide a tractable model where both socialization (or network formation) and productive efforts can be analyzed simultaneously. This permits a full-fledged equilibrium/welfare analysis of network formation with endogenous productive efforts and heterogeneous agents. We show that there exist two stable interior equilibria, which we can Pareto rank. The socially efficient outcome lies between these two equilibria. When the intrinsic returns to production and socialization increase, all equilibrium actions decrease at the Pareto-superior equilibrium, while they increase at the Pareto-inferior equilibrium. In both cases, the percentage change in socialization effort is higher (in absolute value) than that of the productive effort.

Keywords: Peer effects; network formation; welfare; (follow links to similar papers)

JEL-Codes: L22; L51; O31; O38; (follow links to similar papers)

37 pages, November 8, 2010

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

wp10_20.pdf    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Sten Nyberg ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:sunrpe:2010_0020 This page was generated on 2016-11-07 22:04:15