IDEAS home Printed from https://ideas.repec.org/h/spr/lnechp/978-3-540-68409-1_4.html
   My bibliography  Save this book chapter

Network Formation with Closeness Incentives

In: Networks, Topology and Dynamics

Author

Listed:
  • Buechel Berno

    (Institute of Mathematical Economics, Economic Behavior and Interaction Models)

Abstract

Closeness centrality is an index that has been widely used to assess the strength of an agent's position in a network of relationships. We study the formation of networks in a strategic setting, where every agent tries to optimize his closeness centrality. We investigate how the curvature of the benefit function (decreasing vs. increasing marginal returns) affects the set of stable networks and compare the results to the well-known connections model of Jackson and Wolinsky (JET 71, 1996). It turns out that our model can “replicate” the connections model in the sense that each result is translatable from one model into the other and the sets of stable networks coincide for certain specifications. We conclude that the two models incorporate the same kind of linking behavior and that grouping these “closeness-type” models means a first step in organizing network formation models by the type of incentives.

Suggested Citation

  • Buechel Berno, 2009. "Network Formation with Closeness Incentives," Lecture Notes in Economics and Mathematical Systems, in: Ahmad K. Naimzada & Silvana Stefani & Anna Torriero (ed.), Networks, Topology and Dynamics, pages 95-109, Springer.
    • Handle: RePEc:spr:lnechp:978-3-540-68409-1_4
    DOI: 10.1007/978-3-540-68409-1_4
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Antoni Calvó-Armengol & Rahmi İlkılıç, 2009. "Pairwise-stability and Nash equilibria in network formation," International Journal of Game Theory, Springer;Game Theory Society, vol. 38(1), pages 51-79, March.
    2. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    3. K. de Jaegher & J.J.A. Kamphorst, 2008. "Network formation with decreasing marginal benefits of information," Working Papers 08-16, Utrecht School of Economics.
    4. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    5. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
    6. Francis Bloch & Matthew Jackson, 2006. "Definitions of equilibrium in network formation games," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 305-318, October.
    7. Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 319-349, October.
    8. Goyal, Sanjeev & Vega-Redondo, Fernando, 2007. "Structural holes in social networks," Journal of Economic Theory, Elsevier, vol. 137(1), pages 460-492, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Buechel, Berno & Buskens, Vincent, 2011. "The dynamics of closeness and betweenness," Center for Mathematical Economics Working Papers 398, Center for Mathematical Economics, Bielefeld University.
    2. Somayeh Koohborfardhaghighi & Jörn Altmann, 2015. "A Network Formation Model for Social Object Networks," Springer Books, in: Zhenji Zhang & Zuojun Max Shen & Juliang Zhang & Runtong Zhang (ed.), Liss 2014, edition 127, pages 615-625, Springer.
    3. repec:use:tkiwps:1616 is not listed on IDEAS
    4. Berno Buechel & Tim Hellmann, 2012. "Under-connected and over-connected networks: the role of externalities in strategic network formation," Review of Economic Design, Springer;Society for Economic Design, vol. 16(1), pages 71-87, March.
    5. Somayeh Koohborfardhaghighi & Jorn Altmann, 2016. "How Network Visibility and Strategic Networking Leads to the Emergence of Certain Network Characteristics: A Complex Adaptive System Approach," TEMEP Discussion Papers 2016130, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2016.
    6. De Jaegher, K. & Kamphorst, J.J.A., 2015. "Minimal two-way flow networks with small decay," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 217-239.
    7. K. de Jaegher & J.J.A. Kamphorst, 2009. "Two-way Flow Networks with Small Decay," Working Papers 09-34, Utrecht School of Economics.
    8. Pramod C. Mane & Nagarajan Krishnamurthy & Kapil Ahuja, 2019. "Formation of Stable and Efficient Social Storage Cloud," Games, MDPI, vol. 10(4), pages 1-17, November.
    9. repec:use:tkiwps:3434 is not listed on IDEAS
    10. Somayeh Koohborfardhaghighi & Jorn Altmann, 2016. "How Strategic Networking Impacts the Networking Outcome: A Complex Adaptive System Approach," TEMEP Discussion Papers 2016131, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2016.
    11. K. de Jaegher & J.J.A. Kamphorst, 2008. "Network formation with decreasing marginal benefits of information," Working Papers 08-16, Utrecht School of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Buechel, Berno & Buskens, Vincent, 2011. "The dynamics of closeness and betweenness," Center for Mathematical Economics Working Papers 398, Center for Mathematical Economics, Bielefeld University.
    2. Hellmann, Tim & Staudigl, Mathias, 2014. "Evolution of social networks," European Journal of Operational Research, Elsevier, vol. 234(3), pages 583-596.
    3. Berno Buechel & Tim Hellmann, 2012. "Under-connected and over-connected networks: the role of externalities in strategic network formation," Review of Economic Design, Springer;Society for Economic Design, vol. 16(1), pages 71-87, March.
    4. Harmsen - van Hout, Marjolein J.W. & Herings, P. Jean-Jacques & Dellaert, Benedict G.C., 2013. "Communication network formation with link specificity and value transferability," European Journal of Operational Research, Elsevier, vol. 229(1), pages 199-211.
    5. Isabel Melguizo, 2023. "Group representation concerns and network formation," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 151-179, January.
    6. Hellmann, Tim & Landwehr, Jakob, 2014. "Stable Networks in Homogeneous Societies," Center for Mathematical Economics Working Papers 517, Center for Mathematical Economics, Bielefeld University.
    7. Tim Hellmann, 2013. "On the existence and uniqueness of pairwise stable networks," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(1), pages 211-237, February.
    8. Tim Hellmann & Berno Buechel, 2009. "Under-connected and Over-connected Networks," Working Papers 2009.38, Fondazione Eni Enrico Mattei.
    9. König, Michael D. & Battiston, Stefano & Napoletano, Mauro & Schweitzer, Frank, 2012. "The efficiency and stability of R&D networks," Games and Economic Behavior, Elsevier, vol. 75(2), pages 694-713.
    10. Joost Vandenbossche & Thomas Demuynck, 2013. "Network Formation with Heterogeneous Agents and Absolute Friction," Computational Economics, Springer;Society for Computational Economics, vol. 42(1), pages 23-45, June.
    11. Bich, Philippe & Teteryatnikova, Mariya, 2023. "On perfect pairwise stable networks," Journal of Economic Theory, Elsevier, vol. 207(C).
    12. Péter Bayer & Ani Guerdjikova, 2020. "Optimism leads to optimality: Ambiguity in network formation," Working Papers hal-03005107, HAL.
    13. Pascal Billand & Christophe Bravard & Sudipta Sarangi & J. Kamphorst, 2011. "Confirming information flows in networks," Post-Print halshs-00672351, HAL.
    14. Rong, Rong & Houser, Daniel, 2015. "Growing stars: A laboratory analysis of network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 380-394.
    15. Antoni Calvó-Armengol & Rahmi İlkılıç, 2009. "Pairwise-stability and Nash equilibria in network formation," International Journal of Game Theory, Springer;Game Theory Society, vol. 38(1), pages 51-79, March.
    16. Safi, Shahir, 2022. "Listen before you link: Optimal monitoring rules for communication networks," Games and Economic Behavior, Elsevier, vol. 133(C), pages 230-247.
    17. K. de Jaegher & J.J.A. Kamphorst, 2008. "Network formation with decreasing marginal benefits of information," Working Papers 08-16, Utrecht School of Economics.
    18. Philippe Bich & Lisa Morhaim, 2020. "On the Existence of Pairwise Stable Weighted Networks," Mathematics of Operations Research, INFORMS, vol. 45(4), pages 1393-1404, November.
    19. repec:use:tkiwps:1616 is not listed on IDEAS
    20. Matthew Elliott & Arun Chandrasekhar & Attila Ambrus, 2015. "Social Investments, Informal Risk Sharing, and Inequality," 2015 Meeting Papers 189, Society for Economic Dynamics.
    21. Alan Griffith, 2022. "A continuous model of strong and weak ties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(6), pages 1519-1563, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:lnechp:978-3-540-68409-1_4. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.