Title of paper is Identification and Inference of Network Formation Games with Misclassified Links joint with Takuya Ura.

 Abstract: This paper considers a network formation model when links are potentially measured with error. We focus on a game-theoretical model of strategic network formation with incomplete information, in which the linking decisions depend on agents’ exogenous attributes and endogenous positions in the network. In the presence of link misclassification, we derive moment conditions that characterize the identified set of the preference parameters associated with homophily and network externalities. Based on the moment equality conditions, we provide an inference method that is asymptotically valid when a single network with a large number of agents is available. Finally, we apply our results to study trust networks in rural villages in southern India.

Organiser: Christopher Roth