Communication network formation with link specificity and value transferability
AbstractWe model strategic communication network formation with (i) link specificity: link maintenance lowers specific attention and thus value (negative externality previously ignored for communication) and (ii) value transferability via indirect links for informational but not for social value (positive externality modeled uniformly before). Assuming only social value, the pairwise stable set includes many nonstandard networks under high and particular combinations of complete components under low link specificity. Allowing for social and informational value reduces this set to certain fragmented networks under high and the complete network under low link specificity. These extremes are efficient, whereas intermediate link specificity generates inefficiency.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Operational Research.
Volume (Year): 229 (2013)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/eor
Bilateral communication links; Link specificity; Value transferability; Social vs. informational value; Strategic network formation;
Other versions of this item:
- Harmsen - van Hout, Marjolein J.W. & Herings, P. Jean-Jacques & Dellaert, Benedict G.C., 2010. "Communication Network Formation with Link Specificity and Value Transferability," FCN Working Papers 15/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Mar 2011.
- Harmsen-van Hout Marjolein J.W. & Herings P. Jean-Jacques & Dellaert Benedict G.C., 2011. "Communication network formation with link specificity and value transferability," Research Memoranda 022, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
- A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
- C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
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