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Endogenous Link Strength in Directed Communication Networks

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  • Frédéric Deroïan

    () (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579)

Abstract

We present a model of communication network formation in which links'strengths are endogenously determined by individual incentives. Agents are endowed with a fixed amount of resource which they can distribute as they want in directed links. Individuals capture benefits from both direct and indirect access to others, in a way that takes into account the strength of each link. The wheel architecture is shown to be the unique efficient and stable architecture under mild restriction.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00410544.

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Date of creation: 2006
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Handle: RePEc:hal:wpaper:halshs-00410544

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Related research

Keywords: Directed Communication Network; Endogenous Link Strength; Efficiency; Stability;

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References

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  1. Armin Falk & Michael Kosfeld, 2012. "It's all about Connections: Evidence on Network Formation," Review of Network Economics, De Gruyter, vol. 11(3), pages 2.
  2. Dutta, Bhaskar & Mutuswami, Suresh, 1996. "Stable Networks," Working Papers 971, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. Jackson, Matthew O. & van den Nouweland, Anne, 2002. "Strongly Stable Networks," Working Papers 1147, California Institute of Technology, Division of the Humanities and Social Sciences.
  4. Hojman, Daniel & Szeidl, Adam, 2006. "Core and Periphery in Endogenous Networks," Working Paper Series rwp06-022, Harvard University, John F. Kennedy School of Government.
  5. Kim, Chongmin & Wong, Kam-Chau, 2007. "Network formation and stable equilibrium," Journal of Economic Theory, Elsevier, vol. 133(1), pages 536-549, March.
  6. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  7. Feri, Francesco, 2007. "Stochastic stability in networks with decay," Journal of Economic Theory, Elsevier, vol. 135(1), pages 442-457, July.
  8. Bhaskar Dutta & Suresh Mutuswami, 1997. "Stable Networks," Tinbergen Institute Discussion Papers 97-039/1, Tinbergen Institute.
  9. Matsubayashi, Nobuo & Yamakawa, Shigetaka, 2006. "A note on network formation with decay," Economics Letters, Elsevier, vol. 93(3), pages 387-392, December.
  10. Andrea Galeotti, 2006. "One-way flow networks: the role of heterogeneity," Economic Theory, Springer, vol. 29(1), pages 163-179, September.
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Citations

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Cited by:
  1. Breitmoser, Yves & Vorjohann, Pauline, 2012. "Efficient structure of noisy communication networks," MPRA Paper 42862, University Library of Munich, Germany.
  2. Francesco Feri & Miguel A.Mel?ndez-Jim?nez, 2009. "Coordination in Evolving Networks with Endogenous Decay," Working Papers 2009-19, Faculty of Economics and Statistics, University of Innsbruck.

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