L’EMbeDS DS^3: "Identification, estimation and inference in two-sided interaction models"

The DS³ organizing group, alongside the L'EMbeDS Department of Excellence of the Sant'Anna School for Advanced Studies, is launching a new online seminars series devoted to frontier research in data science, its applications and its implications across disciplines.  

The L'EMbeDS Data Science Seminar Series (L'EMbeDS DS³) hosts national and international scholars to discuss cutting-edge methodology, applications in economics, the social sciences -- and beyond, societal implications and governance issues.

For announcements and further information please visit our web page and join our Google Group.

The seminar will feature Federico Crippa (Northwestern University), who will present a talk entitled: “Identification, estimation and inference in two-sided interaction models”

>>Join the event via the following link

ABSTRACT:  

This paper studies a class of models for two-sided interactions, where outcomes depend on latent characteristics of two distinct agent types. Models in this class have two core elements: the matching network, which records which agent pairs interact, and the interaction function, which maps latent characteristics of these agents to outcomes and determines the role of complementarities. I introduce the Tukey model, which captures complementarities with a single interaction parameter, along with two extensions that allow richer complementarity patterns. First, I establish an identification trade-off between the flexibility of the interaction function and the density of the matching network: the Tukey model is identified under mild conditions, whereas the more flexible extensions require dense networks that are rarely observed in applications. Second, I propose a cycle-based estimator for the Tukey interaction parameter and show that it is consistent and asymptotically normal even when the network is sparse. Third, I use its asymptotic distribution to construct a formal test of no complementarities. Finally, an empirical illustration shows that the Tukey model recovers economically meaningful complementarities.