Non-Market Interactions

Edward Glaeser and Jose Scheinkman

No 8053, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A large body of recent research argues that social, or non-market, interactions can explain a wide range of puzzling phenomena from fashion cycles to stock market crashes. This paper attempts to connect the range of these papers with a general model and a broad empirical overview. We establish conditions for existence and uniqueness of equilibria in social interactions models. The existence of multiple equilibria requires sufficient non-linearity in social interactions and only moderate heterogeneity across agents strategic complementarities are neither necesssary nor sufficient for multiple equilibria. We establish conditions for the existence of a social multiplier, which is the ratio of the aggregate outcome-input relationship to the individual outcome-input relationship. Models with multiple equilibria are empirically indistinguishable from models with significant social multipliers. Finally, we show the formal relationship between three known methods of empirically estimating social interactions, and suggests the plusses and minuses of these three approaches.

Date: 2000-12
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (74)

Published as Glaeser, Edward and Jose Scheinkman. “The Future of Urban Economics: Non-Market Interactions,” Brookings-Wharton Papers on Urban Affairs 1 (2000): 101-150.

Downloads: (external link)
http://www.nber.org/papers/w8053.pdf (application/pdf)

Related works:
Working Paper: Non-Market Interactions (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:8053

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w8053

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().