Social Interactions in Large Networks: A Game Theoretic Approach

28 Pages Posted: 20 Feb 2018

See all articles by Haiqing Xu

Haiqing Xu

Department of Economics, University of Texas at Austin

Date Written: February 2018

Abstract

This article studies estimation of social interactions in a large network game, where all observations come from one single equilibrium of a network game with asymmetric information. Simple assumptions about the structure are made to establish the existence and uniqueness of the equilibrium. I show that the equilibrium strategies satisfy a network decaying dependence condition requiring that dependence between two players' decisions decay with their network distance, which serves as the basis for my statistical inference. Moreover, I establish identification and propose a computationally feasible and efficient estimation method, which is illustrated by an empirical application of college attendance.

Suggested Citation

Xu, Haiqing, Social Interactions in Large Networks: A Game Theoretic Approach (February 2018). International Economic Review, Vol. 59, Issue 1, pp. 257-284, 2018, Available at SSRN: https://ssrn.com/abstract=3125191 or http://dx.doi.org/10.1111/iere.12269

Haiqing Xu (Contact Author)

Department of Economics, University of Texas at Austin ( email )

Austin, TX 78712
United States

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