Peer E ects in Endogenous Networks

  title={Peer E ects in Endogenous Networks},
  author={Timo Hiller},
  • Timo Hiller
  • Published 2012
This paper presents a simple model of strategic network formation with local complementarities in e ort levels and positive local externalities. Equilibrium networks display other than the complete and the empty network a core-periphery structure, which is commonly observed in empirical studies. Ex-ante homogenous agents may obtain very di erent ex-post outcomes. These ndings are relevant for a wide range of social and economic phenomena, such as educational attainment, criminal activity, labor… CONTINUE READING
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