NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Matthew Jackson

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Working Papers

June 2014Tractable and Consistent Random Graph Models
with Arun G. Chandrasekhar: w20276
We define a general class of network formation models, Statistical Exponential Random Graph Models (SERGMs), that nest standard exponential random graph models (ERGMs) as a special case. We provide the first general results on when these models' (including ERGMs) parameters estimated from the observation of a single network are consistent (i.e., become accurate as the number of nodes grows). Next, addressing the problem that standard techniques of estimating ERGMs have been shown to have exponentially slow mixing times for many specifications, we show that by reformulating network formation as a distribution over the space of sufficient statistics instead of the space of networks, the size of the space of estimation can be greatly reduced, making estimation practical and easy. We also deve...
June 2013Updating Beliefs with Ambiguous Evidence: Implications for Polarization
with Roland G. Fryer, Jr., Philipp Harms: w19114
We introduce and analyze a model in which agents observe sequences of signals about the state of the world, some of which are ambiguous and open to interpretation. Instead of using Bayes' rule on the whole sequence, our decision makers use Bayes' rule in an iterative way: first to interpret each signal and then to form a posterior on the whole sequence of interpreted signals. This technique is computationally efficient, but loses some information since only the interpretation of the signals is retained and not the full signal. We show that such rules are optimal if agents sufficiently discount the future; while if they are very patient then a time-varying random interpretation rule becomes optimal. One of our main contributions is showing that the model provides a formal foundation for wh...
January 2012The Diffusion of Microfinance
with Abhijit Banerjee, Arun G. Chandrasekhar, Esther Duflo: w17743
We examine how participation in a microfinance program diffuses through social networks. We collected detailed demographic and social network data in 43 villages in South India before microfinance was introduced in those villages and then tracked eventual participation. We exploit exogenous variation in the importance (in a network sense) of the people who were first informed about the program, "the injection points". Microfinance participation is higher when the injection points have higher eigenvector centrality. We estimate structural models of diffusion that allow us to (i) determine the relative roles of basic information transmission versus other forms of peer influence, and (ii) distinguish information passing by participants and non-participants. We find that participants are signi...
May 2011History, Expectations, and Leadership in the Evolution of Social Norms
with Daron Acemoglu: w17066
We study the evolution of the social norm of “cooperation” in a dynamic environment. Each agent lives for two periods and interacts with agents from the previous and next generations via a coordination game. Social norms emerge as patterns of behavior that are stable in part due to agents’ interpretations of private information about the past, which are influenced by occasional past behaviors that are commonly observed. We first characterize the (extreme) cases under which history completely drives equilibrium play, leading to a social norm of high or low cooperation. In intermediate cases, the impact of history is potentially countered by occasional “prominent” agents, whose actions are visible by all future agents, and who can leverage their greater visibility to influence expectations o...

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