We develop a theoretical model in which whites mainly use private vehicles to commute whereas non-whites use public transportation. We show that, for whites and non-whites, higher (time) distance-to-jobs leads to lower search effort. Because of different transport modes, we also show that, at...

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...

We propose a novel mechanism to facilitate understanding of systemic risk in financial markets. The literature on systemic risk has focused on two mechanisms, common shocks and domino-like sequential default. Our approach is a formal model that provides an intellectual combination of the two by...

We study peer effects in education. We first develop a network model that predicts a relationship between own education and peers’ education as measured by direct links in the social network. We then test this relationship using the four waves of the AddHealth data, looking at the impact of...

In this paper, we investigate the impact of peers on own outcomes where all agents embedded in a network choose more than one activity. We develop a simple network model that illustrates these issues. We differentiate between the ‘seemingly unrelated’ simultaneous equations model where...

The aim of this paper is to investigate and understand the effect of high-school friends on years of schooling. We develop a simple network model where students first choose their friends and then decide how much effort they put in education. The empirical salience of the model is tested using...

We develop a model where the decision to commit a crime in a neighboring area is a positive function of the percentage of same-race individuals residing in that area since they can provide crucial information on crime possibilities. The model then predicts a positive spatial correlation in crime...

A model is considered in which optimal search intensity is a result of a trade-off between short-run losses due to higher search costs (more interviews, commuting...) and long-run gains due to a higher chance to find a job. We show that this optimal search intensity is higher in areas...

In this chapter, we provide an overview of research on neighborhoods and social networks and their role in shaping behavior and economic outcomes. We include discussion of empirical and theoretical analyses of the role of neighborhoods and social networks in crime, education and labor-market...

How can a non-democratic ruler provide proper incentives for state bureaucracy? In the absence of competitive elections and separation of powers, the ruler has to be well-informed himself, and to gather information he may use either a secret service or the media. The danger of using a secret...