In a multi-agent contracting setting, agents' performances are related due to both correlating noise and effort spillover. We study the optimal linear contract in which the agents are risk averse. Putting compensation weights on peers' performances helps to filter out common noise, which relaxes...

This paper proposes a novel learning model on social networks that captures settings where individuals interact frequently on multiple, relatively short-lived topics. In this model, each period features a new draw of nature and multiple rounds in which information arrives, gets aggregated and...

Most literature in strategic network formation shows that there is a substantial tension between stability and efficiency. In this note, I show that such is not the case in the twoway flow model with small decay studied by Bala and Goyal (2000a) and De Jaegher and Kamphorst (2015). Specifically,...

Understanding the process of software adoption is of paramount importance to software start-ups. We study a monopolistic seller's optimal consumer network structure formation (seeding, segmentation, sequencing, and pricing strategies) under network effects. We demonstrate the importance of...

This paper reports results from a laboratory experiment on network formation among heterogeneous agents. The experimental design extends the Bala-Goyal (2000) model of network formation with decay and two-way flow of benefits by allowing for agents with lower linking costs or higher benefits to...

We study a networked society where public good provision and access are both local and where selfish agents co-habit with others who follow Kantian imperatives. We find that the locations of the Kantians in the network play a nuanced role in determining aggregate free-riding and material...

This paper introduces a new mechanism through which positive externality spills over in a network. We find that the introduction of the new spillover mechanism plays a major role in reducing the set of Nash equilibrium though at the same time it increases the set of stable equilibria in a...

This paper studies how the strength of social ties are affected by the geographical location of other individuals and their social capital. We characterize the equilibrium in terms of both social interactions and social capital. We show that lower travel costs increase not only the interaction...

We analyze boundedly rational learning in social networks within binary action environments. We establish how learning outcomes depend on the environment (i.e., informational structure, utility function), the axioms imposed on the updating behavior, and the network structure. In particular, we...

Two project leaders (or entrepreneurs) in a network, which captures social relations, recruit players in a strategic, competitive and time-limited process. Each team has an optimal size depending on the project's quality. This is a random variable with a commonly known distribution. Only the...