On the Interaction between Heterogeneity and Decay in Two-way Flow Models
AbstractIn this paper we examine the role played by heterogeneity in the popular “connections model” of Jackson and Wolinsky (1996). We prove that under heterogeneity in values or decay involving only two degrees of freedom, all networks can supported as Nash. Moreover, we show that Nash networks may not always exist. In the absence of decay, neither result can be found in a model with value heterogeneity. Finally, we show that on reducing heterogeneity, both the earlier “anything goes” result and the non-existence problem disappear.
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Bibliographic InfoPaper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 1109.
Date of creation: 2011
Date of revision:
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connections model; decay; two-way flow models;
Other versions of this item:
- Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2012. "On the interaction between heterogeneity and decay in two-way flow models," Theory and Decision, Springer, vol. 73(4), pages 525-538, October.
- 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
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- Andrea Galeotti & Sanjeev Goyal, 2002.
"Network Formation with Heterogeneous Players,"
Tinbergen Institute Discussion Papers
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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,"
UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers)
- 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," Working Papers 479, Bielefeld University, Center for Mathematical Economics.
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