Equilibrium Refinements for the Network Formation Game (with Rahmi İlkılıç) 2019- (Review of Economic Design), https://link.springer.com/article/10.1007%2Fs10058-019-00218-y.
This paper examines a normal form game of network formation due to Myerson (1991). All players simultaneously announce the links they wish to form. A link is created if and only if there is mutual consent for its formation. The empty network is always a Nash equilibrium of this game. We de ne a re nement of Nash equilibria that we call trial perfect. Trial perfect equilibria contain the set of proper equilibria. We show that the set of networks which can be supported by a pure strategy trial perfect equilibrium coincides with the set of pairwise-Nash equilibrium networks, for games with link-responsive payo functions.
This paper examines a normal form game of network formation due to Myerson (1991). All players simultaneously announce the links they wish to form. A link is created if and only if there is mutual consent for its formation. The empty network is always a Nash equilibrium of this game. We de ne a re nement of Nash equilibria that we call trial perfect. Trial perfect equilibria contain the set of proper equilibria. We show that the set of networks which can be supported by a pure strategy trial perfect equilibrium coincides with the set of pairwise-Nash equilibrium networks, for games with link-responsive payo functions.
Contagion of network products in small-world networks - 2019 (Journal of Economic Interaction & Coordination),https://link.springer.com/article/10.1007/s11403-019-00251-8.
We formulate a model in which agents embedded in an exogenous social network decide whether to adopt a new network product or not. In the theoretical part of the paper, we characterize the stochastically stable equilibria for complete networks and cycles. For an arbitrary network structure, we develop a novel graph decomposition method to characterize the set of recurrent communication states, which is a superset of stochastically stable equilibria of the adoption game presented in our model. In the simulation part, we study the contagion process of a network product in small-world networks that systematically represent social networks. We simulate a generalization of the Morris (Rev Econ Stud 67(1):57–78, 2000) Contagion model that can explain the chasm between early adopters and early majority. Our numerical analysis shows that the failure of a new network product is less likely in a highly cliquish network. In addition, the contagion process reaches to steady state faster in random networks than in highly cliquish networks. It turns out that marketers should work with mixed marketing strategies, which will result in a full contagion of a network product and faster contagion rates with a higher probability.
We formulate a model in which agents embedded in an exogenous social network decide whether to adopt a new network product or not. In the theoretical part of the paper, we characterize the stochastically stable equilibria for complete networks and cycles. For an arbitrary network structure, we develop a novel graph decomposition method to characterize the set of recurrent communication states, which is a superset of stochastically stable equilibria of the adoption game presented in our model. In the simulation part, we study the contagion process of a network product in small-world networks that systematically represent social networks. We simulate a generalization of the Morris (Rev Econ Stud 67(1):57–78, 2000) Contagion model that can explain the chasm between early adopters and early majority. Our numerical analysis shows that the failure of a new network product is less likely in a highly cliquish network. In addition, the contagion process reaches to steady state faster in random networks than in highly cliquish networks. It turns out that marketers should work with mixed marketing strategies, which will result in a full contagion of a network product and faster contagion rates with a higher probability.
The impact of wage subsidies on the gender preferences in hiring in registered employment (with Çağla Ökten)
This paper investigates the employment effects of the employment subsidy programs implemented in Turkey since 2008. The Turkish Government put into practice active labor market programs to generate new employment for all women and younger men, the relatively disadvantaged groups in the Turkish labor market. We use a nationally representative micro-level dataset and a difference-in-differences approach to estimate these programs' causal effects. Although these incentive programs are relatively costly, these incentives have a positive impact on the gender preferences in hiring in registered employment, especially in high-skilled white-collar jobs. These wage subsidies result, on average, a five ppt increase in the share of women in newly hired workers in high-skilled white-collar jobs.
This paper investigates the employment effects of the employment subsidy programs implemented in Turkey since 2008. The Turkish Government put into practice active labor market programs to generate new employment for all women and younger men, the relatively disadvantaged groups in the Turkish labor market. We use a nationally representative micro-level dataset and a difference-in-differences approach to estimate these programs' causal effects. Although these incentive programs are relatively costly, these incentives have a positive impact on the gender preferences in hiring in registered employment, especially in high-skilled white-collar jobs. These wage subsidies result, on average, a five ppt increase in the share of women in newly hired workers in high-skilled white-collar jobs.
The impact of the large-scale migration on the unmet healthcare needs of the native-born population in a host country: Evidence from Turkey (with Emre Yüksel and H. Burçin İkizler)
ERF Working Paper
As of December 2018, Turkey is home to 3.6 million Syrian refugees under temporary protection status. The negative externalities of Syrian refugees may affect the native-born population's needs, precisely healthcare needs. The possible increase in healthcare demand due to population increase may escalate unmet healthcare needs (UHCN). The study contributes to the literature by analyzing refugees' effect on the native-born population's unmet healthcare needs. Our central hypothesis is that mass refugee influx increases the ratio of the UHCN arising mainly from systemic reasons, especially at the beginning of the migration crisis. Using a difference-in-differences approach, we find that the UHCN of the native-born population has increased due to the mass refugee influx. We estimate the magnitude of this increase by nearly 6.3% at the beginning of the refugee crisis. The impact diminishes as the imbalance of demand and supply of healthcare services diminishes.
ERF Working Paper
As of December 2018, Turkey is home to 3.6 million Syrian refugees under temporary protection status. The negative externalities of Syrian refugees may affect the native-born population's needs, precisely healthcare needs. The possible increase in healthcare demand due to population increase may escalate unmet healthcare needs (UHCN). The study contributes to the literature by analyzing refugees' effect on the native-born population's unmet healthcare needs. Our central hypothesis is that mass refugee influx increases the ratio of the UHCN arising mainly from systemic reasons, especially at the beginning of the migration crisis. Using a difference-in-differences approach, we find that the UHCN of the native-born population has increased due to the mass refugee influx. We estimate the magnitude of this increase by nearly 6.3% at the beginning of the refugee crisis. The impact diminishes as the imbalance of demand and supply of healthcare services diminishes.
Generalized Attrition In Rotating Panels – Lessons from the Household Labor Force Survey, Turkey (with İnsan Tunalı, Emre Ekinci and Berk Yavuzoğlu)
The challenge in rotating panel is non-ignorable non-response at both ends of a given time window. Our RAN model fills this void. We adjust the bias-prone joint distribution obtained from the balanced panel to obtain transition rates which are consistent with the reported offical cross-section statistics. We provide a brief exposure to the linear RAN model, how adjustment deals with generalized attrition, and apply it to a 3-state problem where the focus is on labor market dynamics. We review the evidence from our investigation on micro data from 12 rounds of the HLFS 2000-2002. Underscore the nature of state dependence.
The challenge in rotating panel is non-ignorable non-response at both ends of a given time window. Our RAN model fills this void. We adjust the bias-prone joint distribution obtained from the balanced panel to obtain transition rates which are consistent with the reported offical cross-section statistics. We provide a brief exposure to the linear RAN model, how adjustment deals with generalized attrition, and apply it to a 3-state problem where the focus is on labor market dynamics. We review the evidence from our investigation on micro data from 12 rounds of the HLFS 2000-2002. Underscore the nature of state dependence.
Homophily, Conformity and The Dynamics of Segregation (with Rahmi İlkılıç)
We use a network model to show how homophily, conjoined with conformity, may shape political divisions along ethnic lines in multi-ethnic societies. We find that the decisive factor is not simply the degree of homophily but the presence of monotone agents, who are only connected with their own types. When there is no monotone agent, even if the level of homophily is unbounded, ethnic divisions can be avoided. The presence of a few monotone agents necessarily divides a sparsely integrated society along ethnic lines.
We use a network model to show how homophily, conjoined with conformity, may shape political divisions along ethnic lines in multi-ethnic societies. We find that the decisive factor is not simply the degree of homophily but the presence of monotone agents, who are only connected with their own types. When there is no monotone agent, even if the level of homophily is unbounded, ethnic divisions can be avoided. The presence of a few monotone agents necessarily divides a sparsely integrated society along ethnic lines.
Free Labor Mobility Network between EU and EFTA Countries (with Rahmi İlkılıç and Kemal Yıldız)
This paper examines both theoretically and empirically (strong) Nash equilibrium of the free labor mobility network formation game. First, we design a network formation game in which each country's action is a choice of a mobility network between a subset of countries. The utility of each country is determined by a country speci c threshold level of absorption ratio and net labor flows. We theoretically characterize all stable and optimal mobility networks under specific assumptions. In our empirical analysis, we focus on EU and EFTA member countries. We observe that some speci c countries incur the maximum loss in the grand mobility network according to our model. These countries turnout to be the ones in which reintroduction of quotas on migration is approved via referendum.
This paper examines both theoretically and empirically (strong) Nash equilibrium of the free labor mobility network formation game. First, we design a network formation game in which each country's action is a choice of a mobility network between a subset of countries. The utility of each country is determined by a country speci c threshold level of absorption ratio and net labor flows. We theoretically characterize all stable and optimal mobility networks under specific assumptions. In our empirical analysis, we focus on EU and EFTA member countries. We observe that some speci c countries incur the maximum loss in the grand mobility network according to our model. These countries turnout to be the ones in which reintroduction of quotas on migration is approved via referendum.
Job Contact Networks and Migration Behavior
We formulate a model in which individuals embedded in an exogenous social network make migration decisions. Individuals prefer to live in the country where they have more contacts. In case of equal number of contacts they prefer to migrate to the host country. We characterize the stochastically stable equilibria for complete networks and cycles. Moreover, we develop a method to determine stable migration patterns for a non-symmetric network structure. Finally, we examine the role of network structure on the sectoral decomposition of the migrant workers in the host country. We characterize a superset of stochastically stable equilibria of the migration process presented in our model via a novel graph decomposition.
We formulate a model in which individuals embedded in an exogenous social network make migration decisions. Individuals prefer to live in the country where they have more contacts. In case of equal number of contacts they prefer to migrate to the host country. We characterize the stochastically stable equilibria for complete networks and cycles. Moreover, we develop a method to determine stable migration patterns for a non-symmetric network structure. Finally, we examine the role of network structure on the sectoral decomposition of the migrant workers in the host country. We characterize a superset of stochastically stable equilibria of the migration process presented in our model via a novel graph decomposition.
The Effects Of Employment Incentive Policies On Employment Dynamics in Turkey: Panel Data Analysis
The main purpose of this study is to provide information on the priority of macroeconomic policies in terms of the employment objectives and assess the impacts of burden on wages and employment incentive policies on employment. For these purposes, the effects of the employment incentive programs, implemented in Turkey by the end of 2008, on the transition probabilities of labor market status (unemployed, employed, or not in the labor force) of the different demographic groups were analyzed by the micro-econometric approach. In the analysis, panel micro data set of Income and Living Conditions Survey for the period 2006-2013 is used. Instead of conventional assessment performed on the stock data, dynamic analysis was preferred, consequently it is aimed to examine the links between economic conjuncture and labor market better and to plan correctly the employment-oriented policies. It has been shown that there is a positive effect on women's employment in formal sector after the Treasury started paying some part of the employer's share of insurance premiums. However, it is thought that during this time some of the arrangements to reduce the negative impact of the global economic crisis on the labor market have reduced the effect of these incentives that is applied to increase the employment of women and young people. In addition, it was observed that the employment incentives starting in 2008 have increased the likelihood of employment of the target group in the services sector, whereas they have reduced the likelihood of employment of the target group in the agricultural sector. On the other hand, no positive effect of the employment incentives on the employment probabilities of the target group in the industrial sector was found.
The main purpose of this study is to provide information on the priority of macroeconomic policies in terms of the employment objectives and assess the impacts of burden on wages and employment incentive policies on employment. For these purposes, the effects of the employment incentive programs, implemented in Turkey by the end of 2008, on the transition probabilities of labor market status (unemployed, employed, or not in the labor force) of the different demographic groups were analyzed by the micro-econometric approach. In the analysis, panel micro data set of Income and Living Conditions Survey for the period 2006-2013 is used. Instead of conventional assessment performed on the stock data, dynamic analysis was preferred, consequently it is aimed to examine the links between economic conjuncture and labor market better and to plan correctly the employment-oriented policies. It has been shown that there is a positive effect on women's employment in formal sector after the Treasury started paying some part of the employer's share of insurance premiums. However, it is thought that during this time some of the arrangements to reduce the negative impact of the global economic crisis on the labor market have reduced the effect of these incentives that is applied to increase the employment of women and young people. In addition, it was observed that the employment incentives starting in 2008 have increased the likelihood of employment of the target group in the services sector, whereas they have reduced the likelihood of employment of the target group in the agricultural sector. On the other hand, no positive effect of the employment incentives on the employment probabilities of the target group in the industrial sector was found.
Agricultural Transformation and Labor Mobility During the ARIP Period in Turkey: Evidence from Micro-Data, 2000-2002 (with İnsan Tunalı) (slides)(pdf)
ERF Working Paper
We analyze the transition dynamics in and out of agricultural and non-agricultural employment in the Turkish labor market during ARIP period. A multinomial logit model is used to determine the factors that affect these processes. Before launching our investigation of the flows, we dealt with the attrition/substitution problem. We reviewed the methodology developed by Tunalı, Ekinci and Yavuzoglu (2011) and adopt it for the problem we have. Empirical findings confirm that there is a systematic relationship between attrition behavior and labor market outcomes in the HLFS. For aged 15 and over, non-participant in both periods are severely over-represented in the balanced panel. In addition, unemployed workers and employed workers in agriculture are under-represented in the balanced panel. We calculate weights (reflation/deflation factors) for an individual. We then use these weights in MNL regression as probability weights. The MNL results enlighten the challenges of making successful transition to non-agriculture that faced by the workers who left the agriculture. Age and educational attainment are crucial for making a successful transition between agriculture and non-agriculture. Elder generations and less educated people are more likely to continue with farming. Better educated individuals are more likely to flow into non-agricultural employment.
ERF Working Paper
We analyze the transition dynamics in and out of agricultural and non-agricultural employment in the Turkish labor market during ARIP period. A multinomial logit model is used to determine the factors that affect these processes. Before launching our investigation of the flows, we dealt with the attrition/substitution problem. We reviewed the methodology developed by Tunalı, Ekinci and Yavuzoglu (2011) and adopt it for the problem we have. Empirical findings confirm that there is a systematic relationship between attrition behavior and labor market outcomes in the HLFS. For aged 15 and over, non-participant in both periods are severely over-represented in the balanced panel. In addition, unemployed workers and employed workers in agriculture are under-represented in the balanced panel. We calculate weights (reflation/deflation factors) for an individual. We then use these weights in MNL regression as probability weights. The MNL results enlighten the challenges of making successful transition to non-agriculture that faced by the workers who left the agriculture. Age and educational attainment are crucial for making a successful transition between agriculture and non-agriculture. Elder generations and less educated people are more likely to continue with farming. Better educated individuals are more likely to flow into non-agricultural employment.