Nash Networks with Heterogeneous Agents
AbstractA non-cooperative model of network formation is developed. Agents form links with others based on the cost of the link and its assessed benefit. Link formation is one-sided, i.e., agents can initiate links with other agents with- out their consent, provided the agent forming the link makes the appropriate investment. Information flw is two-way. The model builds on the work of Bala and Goyal, but allows for agent heterogeneity. Whereas they permit links to fail with a certain common probability, in our model the probability of failure can be different for different links. We investigate Nash networks that exhibit connectedness and super-connectedness. We provide an explicit characterization of certain star networks. Efficiency and Pareto-optimality issues are discussed through examples. We explore alternative model specifications to address potential shortcomings.
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.
Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 337.
Length: 28 p.
Date of creation: 2003
Date of revision:
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-02 (All new papers)
- NEP-CDM-2003-04-02 (Collective Decision-Making)
- NEP-GTH-2003-04-02 (Game Theory)
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.:
- Dutta, Bhaskar & Mutuswami, Suresh, 1996.
971, California Institute of Technology, Division of the Humanities and Social Sciences.
- Borm, P.E.M. & Nouweland, C.G.A.M. van den & Tijs, S.H., 1994.
"Cooperation and communication restrictions: A survey,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-154189, Tilburg University.
- Borm, P.E.M. & Nouweland, C.G.A.M. van den & Tijs, S.H., 1991. "Cooperation and communication restrictions: A survey," Research Memorandum 507, Tilburg University, Faculty of Economics and Business Administration.
- Sanjeev Goyal & Fernando Vega-Redondo, 2000.
"Learning, Network Formation and Coordination,"
Econometric Society World Congress 2000 Contributed Papers
0113, Econometric Society.
- Sanjeev Goyal & Fernando Vega-Redondo, 2000. "Learning, Network Formation and Coordination," Tinbergen Institute Discussion Papers 00-093/1, Tinbergen Institute.
- Fernando Vega Redondo & Sanjeev Goyal, 2001. "Learning, Network Formation And Coordination," Working Papers. Serie AD 2001-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Goyal, S. & Vega-Redondo, F., 2000. "Learning, Network Formation and Coordination," Econometric Institute Research Papers EI 9954-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- McBride, Michael, 2008.
"Position-specific information in social networks: Are you connected?,"
Mathematical Social Sciences,
Elsevier, vol. 56(2), pages 283-295, September.
- Michael McBride, 2003. "Position-specific information in social networks: Are you connected?," Levine's Working Paper Archive 506439000000000265, David K. Levine.
- Matthew O. Jackson, 2002. "The Stability and Efficiency of Economic and Social Networks," Microeconomics 0211011, EconWPA.
- Matthew O. Jackson & Alison Watts, 2000.
"On the Formation of Interaction Networks in Social Coordination Games,"
Econometric Society World Congress 2000 Contributed Papers
0778, Econometric Society.
- Jackson, Matthew O. & Watts, Alison, 2002. "On the formation of interaction networks in social coordination games," Games and Economic Behavior, Elsevier, vol. 41(2), pages 265-291, November.
- Jackson, Matthew O., 1998.
"The Evolution of Social and Economic Networks,"
1044, California Institute of Technology, Division of the Humanities and Social Sciences.
- Kranton, Rachel E, 1996. "Reciprocal Exchange: A Self-Sustaining System," American Economic Review, American Economic Association, vol. 86(4), pages 830-51, September.
- Gilles, R.P. & Sarangi, S., 2003.
"The Role of Trust in Costly Network Formation,"
2003-53, Tilburg University, Center for Economic Research.
- Sudipta Sarangi & Robert P. Gilles, 2004. "The Role of Trust in Costly Network Formation," Econometric Society 2004 North American Summer Meetings 483, Econometric Society.
- Roger B. Myerson, 1976. "Graphs and Cooperation in Games," Discussion Papers 246, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
- Rubinstein, Ariel, 1989. "The Electronic Mail Game: Strategic Behavior under "Almost Common Knowledge."," American Economic Review, American Economic Association, vol. 79(3), pages 385-91, June.
- Kalai, Ehud & Postlewaite, Andrew & Roberts, John, 1978. "Barriers to trade and disadvantageous middlemen: Nonmonotonicity of the core," Journal of Economic Theory, Elsevier, vol. 19(1), pages 200-209, October.
- Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer, vol. 34(3), pages 319-349, October.
- Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-50, October.
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: (Bibliothek).
If references are entirely missing, you can add them using this form.