Social interactions and social preferences in social networks

Citation

Hsieh, Chih-Sheng & Lin, Xu (2020). Social interactions and social preferences in social networks. Journal of Applied Econometrics.

Abstract

We study social interactions when individuals hold altruistic preferences in social networks. Rich network features can be captured in the resulting best response function. The inward network links provide unique information for identifying the altruism effect. We demonstrate that the often ignored altruism is another serious confounding factor of peer effects. Specifically, the estimates of peer effects are approximately 36% smaller after taking into account social preferences. Furthermore, we could identify two types of effects caused by peers' outcomes: the spillover effects and the externality effects, which is impossible in a conventional social interactions model based on the self-interest hypothesis.

URL

https://doi.org/10.1002/jae.2806

Keyword(s)

Social network

Reference Type

Journal Article

Journal Title

Journal of Applied Econometrics

Author(s)

Hsieh, Chih-Sheng
Lin, Xu

Year Published

2020

DOI

10.1002/jae.2806

Reference ID

5917