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Author: William A. Brock
Publisher:
ISBN:
Category : Decision making
Languages : en
Pages : 62
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Book Description
This paper develops a model of individual decisionmaking in the presence of social interactions when the number of available choices is finite. We show how a multinomial logit model framework may be used to model such decisions in a way that permits a tight integration of theory and econometrics. Conditions are given under which aggregate choice behavior in a population exhibits multiple self-consistent equilibria. An econometric version of the model is shown to be identified under relatively weka conditions. That analysis is extended to allow for general error distributions and some preliminary ways to account for the endogeneity of group memberships are developed.
Author: William A. Brock
Publisher:
ISBN:
Category : Decision making
Languages : en
Pages : 62
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Book Description
This paper develops a model of individual decisionmaking in the presence of social interactions when the number of available choices is finite. We show how a multinomial logit model framework may be used to model such decisions in a way that permits a tight integration of theory and econometrics. Conditions are given under which aggregate choice behavior in a population exhibits multiple self-consistent equilibria. An econometric version of the model is shown to be identified under relatively weka conditions. That analysis is extended to allow for general error distributions and some preliminary ways to account for the endogeneity of group memberships are developed.
Author: José-Alberto Guerra
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
This paper presents a multinomial choice model with social interactions in an incomplete network. Individuals form heterogenous rational expectations about the behavior of peers by taking into account their characteristics and the strength of their ties. We show the network conditions under which the endogenous and exogenous effects can be separately identified even in the presence of correlated effects at the group level. Conditions for unique equilibrium are established. We apply our empirical model to occupational choice in nineteenth century London. Thanks to a newly constructed dataset, we use ecclesiastical parish boundaries as proxies for social groups and geographic distances between individuals as measures of the strength of their ties. Our results show that endogenous network effects were important above and beyond correlated and exogenous effects. We uncover distinct impact by occupation type: peers in professional and industrial occupations have a positive impact on the likelihood of following a similar occupation while commercial have a negative one.
Author: William A. Brock
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
This paper provides an analysis of aggregate behavioral outcomes when individual utility exhibits social interaction effects. We study generalized logistic models of individual choice which incorporate terms reflecting the desire of individuals to conform to the behavior of others in an environment of noncooperative decisionmaking. Laws of large numbers are generated in such environments. Multiplicity of equilibria in these models, which are equivalent to the existence of multiple self-consistent means for average choice behavior, will exist when the social interactions exceed a particular threshold. Local stability of these multiple equilibria is also studied. The properties of the noncooperative economy are contrasted with the properties of an economy in which a social planner determines the set of individual choices. The model is additionally shown to be well suited to explaining a number of empirical phenomena, such as threshold effects in individual behavior, ethnic group fixed effects of income equations, and large cross-group differences in binary choice behavior.
Author: Lawrence E. Blume
Publisher: Oxford University Press
ISBN: 9780195162592
Category : Business & Economics
Languages : en
Pages : 396
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Book Description
Derived from the 2001 Santa Fe Institute Conference, "The Economy as an Evolving Complex System III" addresses a wide variety of issues in the fields of economics and complexity, accessing eclectic techniques from many disciplines, provided that they shed light on the economic problem. The subject, a perennial centerpiece of the SFI program of studies, has gained a wide range of followers for its methods of employing empirical evidence in the development of analytical economic theories.
Author: William A. Brock
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: William A. Brock
Publisher:
ISBN:
Category : Consumers' preferences
Languages : en
Pages : 50
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Book Description
Author: Kenneth Train
Publisher: Cambridge University Press
ISBN: 0521766559
Category : Business & Economics
Languages : en
Pages : 399
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Book Description
This book describes the new generation of discrete choice methods, focusing on the many advances that are made possible by simulation. Researchers use these statistical methods to examine the choices that consumers, households, firms, and other agents make. Each of the major models is covered: logit, generalized extreme value, or GEV (including nested and cross-nested logits), probit, and mixed logit, plus a variety of specifications that build on these basics. Simulation-assisted estimation procedures are investigated and compared, including maximum stimulated likelihood, method of simulated moments, and method of simulated scores. Procedures for drawing from densities are described, including variance reduction techniques such as anithetics and Halton draws. Recent advances in Bayesian procedures are explored, including the use of the Metropolis-Hastings algorithm and its variant Gibbs sampling. The second edition adds chapters on endogeneity and expectation-maximization (EM) algorithms. No other book incorporates all these fields, which have arisen in the past 25 years. The procedures are applicable in many fields, including energy, transportation, environmental studies, health, labor, and marketing.
Author: Jess Benhabib
Publisher: Newnes
ISBN: 0444537139
Category : Business & Economics
Languages : en
Pages : 1509
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Book Description
How can economists define and measure social preferences and interactions? Through the use of new economic data and tools, our contributors survey an array of social interactions and decisions that typify homo economicus. Identifying economic strains in activities such as learning, group formation, discrimination, and the creation of peer dynamics, they demonstrate how they tease out social preferences from the influences of culture, familial beliefs, religion, and other forces. Advances our understanding about quantifying social interactions and the effects of culture Summarizes research on theoretical and applied economic analyses of social preferences Explores the recent willingness among economists to consider new arguments in the utility function
Author: Jess Benhabib
Publisher: Elsevier
ISBN: 0444537074
Category : Business & Economics
Languages : en
Pages : 570
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Book Description
Through the use of new economic data and tools, the contributors survey an array of social interactions and decisions that typify homo economicus. Their work brings order to the sometimes conflicting claims that countries, environments, beliefs, and other influences make on our economic decisions.
Author: Andrew Grodner
Publisher: Now Publishers Inc
ISBN: 160198488X
Category : Business & Economics
Languages : en
Pages : 118
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Book Description
Social Interactions in the Labor Market addresses the following questions: How do theoretical economic models and their associated econometric representations change when there are social interactions among households? How do policy implications change as the result of estimated households' social interactions? The authors present a unified theoretical and empirical representation of social interactions as they pertain to labor supply and demand and demonstrate the cases where current policy prescriptions are greatly altered by the presence of social interactions. Section 2 examines theoretically the effect of household interdependencies on how a researcher estimates and interprets labor supply and earnings equations. Having examined labor supply issues, Section 3 and give theoretical attention to labor demand. As a further demonstration how the presence of social interactions complicates thinking about economic policy the authors consider overall labor market outcomes and related economic policy further in Section 4 by examining theoretically the socially optimal wealth distribution. Section 5 measures local economic conditions by the county unemployment rate and neighborhood spillover effects by the racial makeup and poverty rate of the county. Lastly, Section 6 examines the econometric details of implementing an empirical model with possible social interactions in labor supply.
