ENDOGENOUS SOCIAL NETWORKS AND INEQUALITY IN AN INTERGENERATIONAL SETTING

The article examines the joint evolution of human capital investment and social networking where network may be endogenous or exogenous. It extends Cabrales et al. (Games Economic Behavior 72 (2011), 339–60) to dynamic settings allow for intergenerational transfers endowments as decisions. Social multipliers characterize equilibria. associated transfer elasticities exhibit rich dependence on effects allowing elasticity increasing with inequality in parents' capitals. stochastic steady states highlight cross-sectional distribution outcome shocks cognitive skills coefficients.