We examine the impact of informal risk sharing on risk taking incentives when transfers are organized through a social network. A bilateral partial sharing rule satisfies that neighbors share equally a part of their revenue. In such a society, correlated technologies generate interdependent risk...

Homophily, the tendency of linked agents to have similar characteristics, is an important feature of social networks. We present a new model of network formation that allows the linking process to depend on individuals types and study the impact of such a bias on the network structure. Our main...

We provide new results regarding the identification of peer effects. We consider an extended version of the linear-in-means model where each individual has his own specific reference group. Interactions are thus structured through a social network. We assume that correlated unobservables are...

We model network formation when heterogeneous nodes enter sequentially and form connections through both random meetings and network-based search, but with type-dependent biases. We show that there is “long-run integration”, whereby the composition of types in sufficiently old nodesʼ...