The Evolution of Social and Economic Networks
AbstractWe examine the dynamic formation and stochastic evolution of networks connecting individuals whose payoffs from an economic or social activity depends on the network structure in place. Over time, individuals form and sever links connecting themselves to other individuals based on the improvement the resulting network offers them relative to the current network. Such a process creates a sequence of networks that we call an 'improving path'. The changes made along an improving path make the individuals, who added or deleted the relevant link(s) at each date, better off. Such sequences of networks can cycle, and we study conditions on underlying allocation rules that characterize cycles. Building on an understanding of improving paths, we consider a stochastic evolutionary process where in addition to intended changes in the network there is a small probability of unintended changes or errors. Predictions can be made regarding the relative likelihood that the stochastic evolutionary process will lead to any given network at some time. The evolutionary process selects from among the statically stable networks and cycles. We show that in some cases, the evolutionary process selects inefficient networks even though eÃcient ones are statically stable. We apply these results to the matching literature to show that there are contexts in which the evolutionarily stable networks coincide with the core stable networks, and thus achieve eÃciency.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 106 (2002)
Issue (Month): 2 (October)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maxfield, Robert R., 1997. "General equilibrium and the theory of directed graphs," Journal of Mathematical Economics, Elsevier, vol. 27(1), pages 23-51, February.
- Monderer, Dov & Samet, Dov & Shapley, Lloyd S, 1992. "Weighted Values and the Core," International Journal of Game Theory, Springer, vol. 21(1), pages 27-39.
- Glen Ellison, 2010.
"Learning, Local Interaction, and Coordination,"
Levine's Working Paper Archive
391, David K. Levine.
- Matthew O. Jackson & Asher Wolinsky, 1995.
"A Strategic Model of Social and Economic Networks,"
1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Weisbuch, G. & Kirman, A.P. & Herreiner, D., 1996.
96a20, Universite Aix-Marseille III.
- Dutta, Bhaskar & Mutuswami, Suresh, 1996.
971, California Institute of Technology, Division of the Humanities and Social Sciences.
- A. Banerjee & Drew Fudenberg, 2010.
"Word-of-Mouth Communication and Social Learning,"
Levine's Working Paper Archive
425, David K. Levine.
- Jeffrey Ely, 2010. "Local Conventions," Levine's Working Paper Archive 492, David K. Levine.
- Bergin, James & Lipman, Barton L, 1996.
"Evolution with State-Dependent Mutations,"
Econometric Society, vol. 64(4), pages 943-56, July.
- J Bergin & B L Lipman, 1997. "Evolution with state-dependent Mutations," Levine's Working Paper Archive 771, David K. Levine.
- J. Bergin & B. Lipman, 2010. "Evolution with State-Dependent Mutations," Levine's Working Paper Archive 486, David K. Levine.
- BERGIN, James & LIPMAN, Bart, 1994. "Evolution with State-Dependent Mutations," CORE Discussion Papers 1994055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Ritzberger, Klaus & Weibull, Jörgen W., 1993.
"Evolutionary Selection in Normal Form Games,"
Working Paper Series
383, Research Institute of Industrial Economics.
- P. Young, 1999. "The Evolution of Conventions," Levine's Working Paper Archive 485, David K. Levine.
- Topa, Giorgio, 2001.
"Social Interactions, Local Spillovers and Unemployment,"
Review of Economic Studies,
Wiley Blackwell, vol. 68(2), pages 261-95, April.
- Topa, Giorgio, 1997. "Social Interactions, Local Spillovers and Unemployment," Working Papers 97-17, C.V. Starr Center for Applied Economics, New York University.
- Ely Jeffrey C, 2002. "Local Conventions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 2(1), pages 1-32, May.
- Kirman, Alan P & Oddou, Claude & Weber, Shlomo, 1986. "Stochastic Communication and Coalition Formation," Econometrica, Econometric Society, vol. 54(1), pages 129-38, January.
- Roth, Alvin E & Vande Vate, John H, 1990. "Random Paths to Stability in Two-Sided Matching," Econometrica, Econometric Society, vol. 58(6), pages 1475-80, November.
- Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
- M. Kandori & G. Mailath & R. Rob, 1999.
"Learning, Mutation and Long Run Equilibria in Games,"
Levine's Working Paper Archive
500, David K. Levine.
- Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
- Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers 71, Princeton, Woodrow Wilson School - John M. Olin Program.
- Slikker, M. & Nouweland, C.G.A.M. van den, 1997.
"A One-Stage Model of Link Formation and Payoff Division,"
1997-23, Tilburg University, Center for Economic Research.
- Slikker, Marco & van den Nouweland, Anne, 2001. "A One-Stage Model of Link Formation and Payoff Division," Games and Economic Behavior, Elsevier, vol. 34(1), pages 153-175, January.
- Jeffrey C. Ely, 2002. "Local Conventions," Discussion Papers 1349, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- Matthew O. Jackson & Bhaskar Dutta, 2000. "original papers : The stability and efficiency of directed communication networks," Review of Economic Design, Springer, vol. 5(3), pages 251-272.
- Peyton Young & Dean Foster, 2010. "Cooperation in the Short and in the Long Run," Levine's Working Paper Archive 494, David K. Levine.
- Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996.
"Crime and Social Interactions,"
The Quarterly Journal of Economics,
MIT Press, vol. 111(2), pages 507-48, May.
- Edward L. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995. "Crime and Social Interactions," NBER Working Papers 5026, National Bureau of Economic Research, Inc.
- Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995. "Crime and Social Interactions," Harvard Institute of Economic Research Working Papers 1738, Harvard - Institute of Economic Research.
- Tesfatsion, Leigh, 1997.
"A Trade Network Game with Endogenous Partner Selection,"
Staff General Research Papers
1680, Iowa State University, Department of Economics.
- Leigh TESFATSION, 1995. "A Trade Network Game With Endogenous Partner Selection," Economic Report 36, Iowa State University Department of Economics.
- Gerard Weisbuch & Alain Kirman & EHESS, . "Market Organizations for Perishable Goods," Computing in Economics and Finance 1997 60, Society for Computational Economics.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.