An Equilibrium -correction Model for Dynamic Network Data

We propose a two-stage MRQAP to analyze dynamic network data, within the framework of an equilibrium-correction (EC) model. Extensive simulation results indicate practical relevance of our method and its improvement over standard OLS. An empirical illustration additionally shows that the EC model yields interpretable parameters, in contrast to an unrestricted dynamic model. * We would like to thank Richard Paap, Bas Donkers, Erjen van Nierop and Frans Stokman for useful comments. ‡ Corresponding author: Erasmus University Rotterdam, Tinbergen Institute, P.O. Box 1738, 3000 DR ROTTERDAM, The Netherlands, Tel: ++31 10 4088938, Fax: ++31(0)10-4089031, E-mail: [email protected]