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Endogenous network production functions with selectivity

William Horrace (), Xiaodong Liu and Eleonora Patacchini

Journal of Econometrics, 2016, vol. 190, issue 2, 222-232

Abstract: We consider a production function that transforms inputs into outputs through peer effect networks. The distinguishing features of this model are that the network is formal and observable through worker scheduling, and selection into the network is done by a manager. We discuss identification and suggest several estimation techniques. We tackle endogeneity arising from selection into groups and exposure to common group factors by employing a polychotomous Heckman-type selection correction. We illustrate our method using data from the Syracuse University Men’s Basketball team, where at any time the coach selects a lineup and players interact strategically to win games.

Keywords: Stochastic frontier model; Spatial autoregressive model; Peer effects; Endogenous network formation; Selectivity (search for similar items in EconPapers)
JEL-codes: C31 C44 D24 (search for similar items in EconPapers)
Date: 2016
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Related works:
Working Paper: Endogenous Network Production Functions with Selectivity (2014) Downloads
Working Paper: Endogenous Network Production Functions with Selectivity (2014) Downloads
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