TrainingsMasterEconomicsCoursesEconomics of networks

Master EconomicsUE Economics of networks

Content

The objective of this course is to provide an introduction to a fast-growing new field of research, the economics of networks. At the end of the course, students should notably be familiar with elementary network notions, should understand the microeconomic and econometric foundations of linear models of peer effects in networks and should be able to compute Nash equilibria of a model of altruism in networks.

Course outline : The course is organized in four parts.

(1) An introduction to the field.

A new field of research. Reasons behind its emergence. Examples of networks. Overview of the field (2) Elementary network notions.

Adjacency matrix. Types of networks. Specific networks. Degree. Density. Walks. Paths. Cycles. Components. Shortest paths. Diameter. Clustering. Homophily.

(3) Peer effects in networks : theory and econometrics.

Sources of correlations between peers’ outcomes. Simultaneity and strategic interactions. Continuous outcomes and small interactions. Bonacich centrality. Large interactions and bounds. Binary outcomes. Econometric issues : identification, estimation.

(4) Altruism and informal transfer in networks.

Magnitude and motives behind informal transfers. The empirics of perfect insurance. Informal insurance in networks. Altruism in networks.

Professional skills

  • Ability to manipulate formal concepts.
  • Interest in research.
  • Independence, curiosity, conscientiousness.

Language used

Main language used by this course: Anglais.

Bibliography

Self-contained lecture notes with exercises and detailed references are provided. For students interested in going beyond these notes, three books are recommended :

  • Social and Economic Networks, Matthew O. Jackson, Princeton University Press.
  • The Oxford Handbook of the Economics of Networks, Yann Bramoullé, Andrea Galeotti and Brian Rogers (eds.), Oxford University Press.
  • Connected : The Surprising Power of Our Social Networks and How They Shape our Lives, Nicholas A. Christakis and James H. Fowler, Little, Brown & Company.

Fundamental prerequisites

Students must have successfully completed graduate entry-level courses in microeconomic theory, game theory and econometrics.

Structure and organisation

Lectures and exercises.

Volume of teachings

  • Lectures: 24 hours

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