Which Club Should I Attend, Dad?: Targeted Socialization and Production

59 Pages Posted: 23 Jan 2015

See all articles by Facundo Albornoz

Facundo Albornoz

University of Birmingham

Antonio Cabrales

University College London - Department of Economics

Esther Hauk

Instituto de Análisis Económic (IAE) Barcelona

Date Written: December 2014

Abstract

We study a model that integrates productive and socialization efforts with network choice and parental investments. We characterize the unique symmetric equilibrium of this game. We first show that individuals underinvest in productive and social effort, but that solving only the investment problem can exacerbate the misallocations due to network choice, to the point that it may generate an even lower social welfare if one of the networks is sufficiently disadvantaged. We also study the interaction of parental investment with network choice. We relate these equilibrium results with characteristics that we find in the data on economic co-authorship and field transmission between advisors and advisees.

Keywords: cultural identity, immigrant sorting, network formation, parental involvement, peer effects

JEL Classification: I20, I28, J15, J24, J61

Suggested Citation

Albornoz, Facundo and Cabrales, Antonio and Hauk, Esther, Which Club Should I Attend, Dad?: Targeted Socialization and Production (December 2014). CEPR Discussion Paper No. DP10321. Available at SSRN: https://ssrn.com/abstract=2554396

Facundo Albornoz (Contact Author)

University of Birmingham ( email )

Economics Department
Birmingham, B15 2TT
United Kingdom

Antonio Cabrales

University College London - Department of Economics ( email )

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Esther Hauk

Instituto de Análisis Económic (IAE) Barcelona ( email )

Barcelona, Bellaterra 08193
Spain

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