Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/162425 
Year of Publication: 
2017
Series/Report no.: 
Working Paper No. 222
Version Description: 
Revised version, May 2017
Publisher: 
University of Zurich, Department of Economics, Zurich
Abstract: 
We analyze binary choice models in communication networks, in which both, the formation of links in the network as well as the action choices are endogenous. We provide a complete characterization of the equilibrium action choices and networks, where agents choose their strategies - actions and links - according to a perturbed best response update rule. We show that a threshold exists in the linking cost and the conformity parameter, giving rise to either a sparse or a densely connected communication network. Moreover, we show how the theoretical model can be efficiently estimated using cross sectional data on agents choices and their network of interactions.
Subjects: 
Diffusion
technology adoption
networks
riots
protests
Arab spring
JEL: 
D74
D72
D71
D83
C72
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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