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Working papers


Homophily, Peer Effects, and Dishonesty

Liza Charroin, Bernard Fortin, Marie Claire Villeval, Working paper GATE 2021-07
If individuals tend to behave like their peers, is it because of conformity, that is, the preference of people to align behavior with the behavior of their peers ; homophily, that is, the tendency of people to bond with similar others ; or both ? We address this question in the context of an ethical dilemma. Using a peer effect model allowing for homophily, we designed a real-effort laboratory experiment in which individuals could misreport their performance to earn more. Our results reveal a preference for conformity and for homophily in the selection of peers, but only among participants who were cheating in isolation. The size of peer effects is similar when identical peers were randomly assigned and when they were selected by individuals. We thus jointly reject the presence of a self-selection bias in the peer effect estimates and of a link strength effect.

Allocation Rules for Multi-choice Games with a Permission Tree Structure

David Lowing, Working paper GATE 2021-06
We consider multi-choice cooperative games with a permission tree structure. Multi-choice games are a generalization of a cooperative transferable utility games in which each player has several activity levels. In addition, a permission tree structure models a situation in which a player needs permission from another player to cooperate. In this framework, the influence of a permission structure on the possibility of cooperation may have several interpretations depending on the context. In this paper, we investigate several of these interpretations and introduce for each of them a new allocation rule that we axiomatically characterize.