Endogenous Network Production Functions with Selectivity

Author(s)/Creator(s)

William C. Horrace, Syracuse UniversityFollow
Xiaodong Liu, University of Colorado BoulderFollow
Eleonora Patacchini, Syracuse UniversityFollow

Description/Abstract

We consider a production function model that transforms worker inputs into outputs through peer effect networks. The distinguishing features of this production model are that the network is formal and observable through worker scheduling, and selection into the network is done by a manager. We discuss identification and suggest a variety of estimation techniques. In particular, we tackle endogeneity issues arising from selection into groups and exposure to common group factors by employing a polychotomous Heckman-type selection correction. We illustrate our method using data from the Syracuse University Men’s Basketball team, where at any point in time the coach selects a lineup and the players interact strategically to win games.

Document Type

Working Paper

Date

Spring 5-2014

Keywords

Stochastic Frontier Model, Spatial Autoregressive Model, Peer Effects, Endogenous Network Formation, Selectivity

Language

English

Series

Working Papers Series

Disciplines

Econometrics | Economics | Industrial Organization | Labor Economics

Additional Information

Working paper no. 168

Recommended Citation

Horrace, William C.; Liu, Xiaodong; and Patacchini, Eleonora, "Endogenous Network Production Functions with Selectivity" (2014). Center for Policy Research. 200.
https://surface.syr.edu/cpr/200

Source

Local input

Creative Commons License

This work is licensed under a Creative Commons Attribution 3.0 License.