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Networks of Relations

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Author Info
Giancarlo Spagnolo
Steffen Lippert

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Abstract

In this paper, we model networks of relational contracts. We explore sanctioning power within these networks under different information technologies depending on the shape of the network. The value of the relational network lies in the enforcement of cooperative agreements which would not be enforceable for the agents without access to the punishment power of other network members. We identify conditions for stability of such networks, conditions for transmission of information about past actions, and conditions under which self-sustainable subnetworks may actually inhibit a stable network

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Paper provided by Econometric Society in its series Econometric Society 2004 North American Winter Meetings with number 496.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nawm04:496

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Keywords: Networks Relational Contracts Collusion Social Capital

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Find related papers by JEL classification:
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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  1. Socio-Economics of Innovation
References listed on IDEAS
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  8. Giancarlo Spagnolo & Steffen Lippert, 2004. "Networks of Relations," Econometric Society 2004 North American Winter Meetings 496, Econometric Society. [Downloadable!]
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Full references

Cited by:
(explanations, 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.)

  1. Steffen Lippert & Giancarlo Spagnolo, 2004. "Networks of Relations," Discussion Papers 28, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
    Other versions:
  2. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  3. Matthew O. Jackson, 2003. "A survey of models of network formation: Stability and efficiency," Working Papers 1161, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
    Other versions:
  4. Alfonso Miranda, 2003. "Socio-economic characteristics, completed fertility, and the transition from low to high order parities in Mexico," Labor and Demography 0308001, EconWPA. [Downloadable!]
  5. Arun Sundararajan, 2008. "Local Network Effects and Complex Network Structure," Contributions to Theoretical Economics, Berkeley Electronic Press, vol. 7(1), pages 1319-1319. [Downloadable!] (restricted)
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