DP14304 Econometric Models of Network Formation

Author(s): Áureo De Paula
Publication Date: January 2020
Keyword(s): dyadic models, Network econometrics, strategic network formation models
JEL(s):
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14304

This article provides a selective review on the recent literature on econometric models of network formation. The survey starts with a brief exposition on basic concepts and tools for the statistical description of networks. I then offer a review of dyadic models, focussing on statistical models on pairs of nodes and describe several developments of interest to the econometrics literature. The article also presents a discussion of non- dyadic models where link formation might be influenced by the presence or absence of additional links, which themselves are subject to similar influences. This is related to the statistical literature on conditionally specified models and the econometrics of game theoretical models. I close with a (non-exhaustive) discussion of potential areas for further development.