Document de travail

An Econometric Model of Network Formation with an Application to Board Interlocks between Firms

Cristina Gualdani

Résumé

The paper provides a framework for partially identifying the parameters governing agents’ preferences in a static game of network formation with interdependent link decisions, complete information, and transferable or non-transferable payoffs. The proposed methodology attenuates the computational difficulties arising at the inference stage - due to the huge number of moment inequalities characterising the sharp identified set and the impossibility of brute-force calculating the integrals entering them - by decomposing the network formation game into local games which have a structure similar to entry games and are such that the network formation game is in equilibrium if and only if each local game is in equilibrium. As an empirical illustration of the developed procedure, the paper estimates firms’ incentives for having executives sitting on the board of competitors, using Italian data.

Mots-clés

network formation; pure strategy Nash equilibrium; pairwise stability; multiple equilibria; partial identification; moment inequalities; local games; board interlocks;

Codes JEL

  • C1: Econometric and Statistical Methods and Methodology: General
  • C57: Econometrics of Games
  • C62: Existence and Stability Conditions of Equilibrium

Remplacé par

Cristina Gualdani, « An Econometric Model of Network Formation with an Application to Board Interlocks between Firms », Journal of Econometrics, vol. 224, n° 2, octobre 2021, p. 345–370.

Référence

Cristina Gualdani, « An Econometric Model of Network Formation with an Application to Board Interlocks between Firms », TSE Working Paper, n° 17-898, mars 2018, révision juillet 2019.

Voir aussi

Publié dans

TSE Working Paper, n° 17-898, mars 2018, révision juillet 2019