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Speaker:
Andreas Steinmayr (LMU München)

Information and the Formation of Social Networks
^{(Toman Barsbai, Victoria Licuanan, Andreas Steinmayr, Erwin Tiongson, and Dean Yang)}

Abstract
Interventions reducing imperfect information may change the social network. When information and social networks are complements, improved information can increase acquisition of network links. When information and social networks are substitutes, by contrast, improved information can suppress social network expansion. We analyze the impact of a randomized controlled trial of a Philippine government program improving information for Filipinos departing for the U.S. as new immigrants. Improved information led immigrants to have substantially smaller social networks. The treatment had no effect on employment, wellbeing, or other outcome domains. Consistent with the theory, the treatment reduced social networks more in places likely to have lower friend acquisition costs (those with larger Filipino immigrant populations). Information and social networks appear to be substitutes: when new immigrants are better-informed, they invest less in developing social networks in their new societies.

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