Revealed Social Networks

Christopher Chambers, Yusufcan Masatlioglu and Christopher Turansick

Papers from arXiv.org

Abstract: The linear-in-means model is the standard empirical model of peer effects. Using choice data and exogenous group variation, we first develop a revealed preference style test for the linear-in-means model. This test is formulated as a linear program and can be interpreted as a no money pump condition with an additional incentive compatibility constraint. We then study the identification properties of the linear-in-means model. A key takeaway from our analysis is that there is a close relationship between the dimension of the outcome variable and the identifiability of the model. Importantly, when the outcome variable is one-dimensional, failures of identification are generic. On the other hand, when the outcome variable is multi-dimensional, we provide natural conditions under which identification is generic.

Date: 2025-01, Revised 2025-06
New Economics Papers: this item is included in nep-cta, nep-ecm, nep-net and nep-ure
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