arXiv 26 Mar 2026 · Econometrics
arXiv:2603.25641 · PDF · DOI · OpenAlex · Extracted main text
This paper studies how to estimate an individual's taste for forming a connection with another individual in a network. It compares the difficulty of estimation with and without the assumption that utility is transferable between individuals, and with and without the assumption that regressors are symmetric across individuals in the pair. I show that when pair-specific regressors are symmetric, the sufficient conditions for consistency and asymptotic normality of the maximum likelihood estimator that assumes transferable utility (TU-MLE) are also sufficient for the maximum likelihood estimator that does not assume transferable utility (NTU-MLE). When regressors are asymmetric, I provide sufficient conditions for the consistency and asymptotic normality of the NTU-MLE. I also provide a specification test to assess the validity of the transferable utility assumption. Two applications from different fields of economics demonstrate the value of my results. I find evidence of researchers using the TU-MLE when the transferable utility assumption is violated, and evidence of researchers using NTU-model-based estimators when the validity of the transferable utility assumption cannot be rejected.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Li, Ming, Zhentao, Shi, Zheng, Yapeng (2024) Estimation and Inference in Dyadic Network Formation Models with Nontransferable Utilities | 1.000 | 24 | 3 | 100% |
| 2 | Gao, Wayne Yuan, Li, Ming, Xu, Sheng (2023) Logical differencing in dyadic network formation models with nontransferable utilities | 1.000 | 19 | 3 | 100% |
| 3 | Graham, Bryan S (2017) An Econometric Model of Network Formation With Degree Heterogeneity | 1.000 | 6 | 3 | 100% |
| 4 | Goeree, Jacob K., McConnell, Margaret A., Mitchell, Tiffany, Tromp,… (2010) The 1/d Law of Giving | 0.874 | 7 | 2 | 100% |
| 5 | Poirier, Dale J (1980) Partial observability in bivariate probit models | 0.874 | 7 | 2 | 100% |
| 6 | Newey, Whitney K., McFadden, Daniel (1994) Chapter 36 Large sample estimation and hypothesis testing | 0.874 | 6 | 2 | 100% |
| 7 | Self, Steven G., Liang, Kung-Yee (1987) Asymptotic Properties of Maximum Likelihood Estimators and Likelihood Ratio Tests Under Nonstandard Conditions | 0.811 | 4 | 2 | 100% |
| 8 | Nolan, Deborah, Pollard, David (1987) U-Processes: Rates of Convergence | 0.737 | 5 | 2 | 60% |
| 9 | Serfling, Robert J (1980) Approximation theorems of mathematical statistics | 0.737 | 4 | 2 | 75% |
| 10 | Comola, Margherita, Fafchamps, Marcel (2014) Testing Unilateral and Bilateral Link Formation | 0.511 | 2 | 1 | 100% |
Showing the top 10 of 28 scored citations.