The Center for Research in Economic Analysis and the Luxembourg School of Finance will host a doctoral course on the “Economics of Networks” during three days in February.

 Yves Zenou will hold this course which is open to all Ph.D. students and eligible Master students.

It has been recognized for a long time that non-market interactions, i.e. interactions between agents that are not mediated by the market, are crucial to explain different economic phenomena such as stock market crashes, growth, education, religion, crime, etc. In particular, peer effects are an intragroup externality, homogeneous across group members, that captures the average influence that members exert on each other.

Zenou will explicitly provide the particular structure of this dependence on group behavior. In particular, if one considers a network of links between agents, then the peer influence varies across agents in the network, and the intra-group externality one obtains is heterogeneous   across agents. Networks and peer effects are in the heart of most non-market relationships.

The aim of this lecture is to present the recent literature on social networks by exposing the economics, sociological and physics/applied mathematics approaches, showing their similarities and differences. In particular, the two main ways of modeling network formation. While the physics/applied mathematics approach is capable of reproducing most observed networks, it does not explain why they emerge.

On the contrary, the economics approach is very precise in explaining why networks emerge but does a poor job in matching real-world networks. The class will also analyze behaviours on networks, which take networks as given and focus on the impact of their structure on individuals’ outcomes. Using a game-theoretical framework, it will then compare the results with those obtained in sociology. The class will focus on applications of social networks: labor-market networks, R&D networks, crime networks and homophily and networks.

Yves Zenou  is professor of economics at Stockholm University and Senior Research Fellow at the Research Institute of Industrial Economics.

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•  When? From Tuesday, February 15 ^th  through Thursday, February 17 ^th  
•  Where? Campus Limpertsberg, 162a avenue de la Faiencerie, Luxembourg

Further information:

• Doctoral Studies in Economics and Finance, dsef@uni.lu
• Elisa Ferreira: +352 46 66 44 - 6336

Registration:

Free of charge. Registration mandatory at dsef@uni.lu before January 31 ^st  2011 .
Open to all Ph.D. students and master students who have sufficient economic, financial and mathematical training, as it is the case for 2 ^nd  year master students in Financial Economics in Luxembourg.