On the interaction between heterogeneity and decay in two-way flow models
AbstractIn this article, we examine the role played by heterogeneity in the popular “connections model” of Jackson and Wolinsky (J Econ Theory 71(1):355–365, 1996 ). We prove that when heterogeneity with respect to the values of resources, or the information decay parameter, depends on the identity of the player who forms the link, and the player who receives the link, all networks can be supported as Nash. Moreover, we show that Nash networks may not always exist. Interestingly, in the absence of decay, neither result occurs in a model with value heterogeneity. Finally, we show that when reducing heterogeneity, all networks cannot be supported as Nash, and the non-existence problem also disappears. Copyright Springer Science+Business Media, LLC. 2012
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Bibliographic InfoArticle provided by Springer in its journal Theory and Decision.
Volume (Year): 73 (2012)
Issue (Month): 4 (October)
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Web page: http://www.springerlink.com/link.asp?id=100341
Connections model; Decay; Two-way flow models; Nash networks; C72; D85;
Other versions of this item:
- Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2011. "On the Interaction between Heterogeneity and Decay in Two-way Flow Models," Working Papers 1109, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2011. "On the Interaction between Heterogeneity and Decay in Two-way Flow Models," Post-Print halshs-00574258, HAL.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
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.:
- Andrea Galeotti & Sanjeev Goyal, 2002.
"Network Formation with Heterogeneous Players,"
Tinbergen Institute Discussion Papers
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- Sudipta Sarangi & Hans Haller & Jurjen Kamphorst, .
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Departmental Working Papers
2005-14, Department of Economics, Louisiana State University.
- Philipp Möhlmeier & Agnieszka Rusinowska & Emily Tanimura, 2013.
"A degree-distance-based connections model with negative and positive externalities,"
Documents de travail du Centre d'Economie de la Sorbonne
13040, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Philipp Möhlmeier & Agnieszka Rusinowska & Emily Tanimura, 2013. "A degree-distance-based connections model with negative and positive externalities," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00825266, HAL.
- Philipp Möhlmeier & Agnieszka Rusinowska & Emily Tanimura, 2013. "A degree-distance-based connections model with negative and positive externalities," Working Papers 479, Bielefeld University, Center for Mathematical Economics.
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