STRUCTURAL INTERVENTIONS IN NETWORKS

Yang Sun, Wei Zhao and Junjie Zhou

International Economic Review, 2023, vol. 64, issue 4, 1533-1563

Abstract: Two types of interventions are commonly implemented in networks: characteristics interventions, which influence individuals' intrinsic incentives, and structural interventions, which target the social links among individuals. In this article, we provide a general framework to evaluate the distinct equilibrium effects of both types of interventions. We show that any structural intervention is outcome‐equivalent to an endogenously determined characteristics intervention. We present a wide range of applications of our theory, including evaluating a potential new link in a community, identifying the most wanted criminal(s) in delinquent networks, and determining whether a structural intervention improves certain welfare measures.

Date: 2023
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