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Thursday, November 7, 2019 at 11:40am to 1:10pm
Uris Hall, 494
Central Campus
Xu Lin - Virginia Tech
Social Interactions and Social Preferences in Social Networks (joint w/Chih-Sheng Hsieh)
Abstract: We extend the utility speci cation in Ballester et al. (2006) to study social interactions when individuals hold altruistic preferences in social networks. We show that rich network features can be captured in the best response function derived by maximizing the extended utility which incorporates altruism, thereby providing microfoundation for studies on how network features mediate peer e ects or other important features in social interactions. We demonstrate that the often ignored altruism is another serious confounding factor of peer e ects. Our results show that the estimates of peer a ects are approximately 36% smaller under social preferences. Furthermore, we could separately identify two di erent types of e ects caused by peers' outcomes: the (usually positive) spillover e ects and the direct (negative or positive) externality e ects, which is impossible in a conventional social interactions model based on the self-interest hypothesis.
Ulrike Kroeller
6072554254
Xu Lin
Virginia Tech
Cornell Economics Community (List Serve Members)