The industrial organization of developing countries is characterized by the pervasive use of subcontracting arrangements among small, financially constrained firms. This paper asks whether vertical integration relaxes those financial constraints. It shows that vertical integration trades off the...

We develop a model of endogenous network formation in order to examine the incentives for R&D collaboration in a mixed oligopoly. Our analysis reveals that the complete network, where each firm collaborates with all others, is uniquely stable, industry-profit maximizing and efficient. This...

We analyze delinquent networks of adolescents in the United States. We develop a dynamic network formation model showing who the key player is, i.e. the criminal who once removed generates the highest possible reduction in aggregate crime level. We then structurally estimate our model using data...

We study learning and influence in a setting where agents communicate according to an arbitrary social network and naïvely update their beliefs by repeatedly taking weighted averages of their neighbors’ opinions. A focus is on conditions under which beliefs of all agents in large societies...

This paper studies whether conformism behavior affects individual outcomes in crime. We present a social network model of peer effects with ex-ante heterogeneous agents and show how conformism and deterrence affect criminal activities. We then bring the model to the data by using a very detailed...

Network structure has a significant role in determining the outcomes of many socioeconomic relationships, including the antagonistic ones. In this paper we study a situation in which agents, embedded in a network, simultaneously play interrelated bilateral contest games with their neighbors....

We investigate the role of networks of military alliances in preventing or encouraging wars between groups of countries. A country is vulnerable to attack if there is some fully-allied group of countries that can defeat that country and its (remaining) allies based on a function of their...

When procurement contracts are incomplete, they are frequently changed after the contract is awarded to the lowest bidder. This results in a final cost that differs from the initial price, and may involve significant transaction costs due to renegotiation. We propose a stylized model of bidding...

This study surveys the academic and professional literature examining the privatisation of state-owned enterprises (SOEs), with a focus on empirical studies. Privatisation has been instrumental in reducing state ownership in many countries and had a transforming effect on global stock markets,...

In all social and economic interactions, individuals or coalitions choose not only with whom to interact but how to interact, and over time both the structure (the “with whom”) and the strategy (“the how”) of interactions change. Our objectives here are to model the structure and...