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Networks of Relations

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  • Giancarlo Spagnolo
  • Steffen Lippert

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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