Specification and Estimation of Network Formation and Network Interaction Models with the Exponential Probability Distribution

@inproceedings{Hsieh2017SpecificationAE,
  title={Specification and Estimation of Network Formation and Network Interaction Models with the Exponential Probability Distribution},
  author={Chih-Sheng Hsieh and Lung-fei Lee},
  year={2017}
}
In this paper, we model network formation and network interactions under a unified framework. The key feature of our model is to allow individuals to respond to incentives stemming from interaction benefits on certain activities when they choose friends (network links), while capturing homophily in terms of unobserved characteristic variables in network formation and activities. There are two advantages of this modeling approach: first, one can evaluate whether incentives from certain… CONTINUE READING