Revealed Social Networks

Speaker: Yusufcan Masatlioglu (Maryland)
When: Wednesday, April 2 – 12:30 PM (Santiago)
Where: Sala Consejo (401) – Beauchef 851, 4th floor | Department of Industrial Engineering

Abstract:
People are influenced by their peers when making decisions. In this paper, we study the linear-in-means model, which is the standard empirical model of peer effects. As data on the underlying social network is often difficult to come by, we focus on data that only captures an agent’s choices.

Under exogenous agent participation variation, we study two questions. We first develop a revealed preference-style test for the linear-in-means model. We then study the identification properties of the linear-in-means model. With sufficient participation variation, we show how an analyst is able to recover the underlying network structure and social influence parameters from choice data. Our identification result holds when we allow the social network to vary across contexts. To recover predictive power, we consider a refinement that allows us to extrapolate the underlying network structure across groups and provide a test of this version of the model.