IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/114884.html
   My bibliography  Save this paper

Efficient networks in connections models with heterogeneous nodes and links

Author

Listed:
  • Olaizola, Norma
  • Valenciano, Federico

Abstract

We culminate the extension of the results on efficiency in the seminal connections model of Jackson and Wolinsky (1996), partially addressed in previous papers. In a model where both nodes and links are heterogeneous, we prove that efficiency is reached by networks with a particular type of architecture that we call "hierarchical flower networks". These networks have a unique non-trivial component, within which one of the nodes with a highest value is directly connected with the others in the component, among which some pairs are directly connected. Moreover, the greatest the sum of the values of two nodes, the greatest the strength of their connection, be it direct by a link or indirect by means of two links through the central node.

Suggested Citation

  • Olaizola, Norma & Valenciano, Federico, 2022. "Efficient networks in connections models with heterogeneous nodes and links," MPRA Paper 114884, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:114884
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/114884/1/MPRA_paper_114884.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    2. Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
    3. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    4. Norma Olaizola & Federico Valenciano, 2020. "Dominance of weighted nested split graph networks in connections models," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(1), pages 75-96, March.
    5. Olaizola, By Norma & Valenciano, Federico, 2021. "Efficiency and stability in the connections model with heterogeneous nodes," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 490-503.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Norma Olaizola & Federico Valenciano, 2023. "A connections model with decreasing returns link-formation technology," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 14(1), pages 31-61, March.
    2. Bich, Philippe & Teteryatnikova, Mariya, 2023. "On perfect pairwise stable networks," Journal of Economic Theory, Elsevier, vol. 207(C).
    3. Grabisch, Michel & Rusinowska, Agnieszka, 2011. "Influence functions, followers and command games," Games and Economic Behavior, Elsevier, vol. 72(1), pages 123-138, May.
    4. Baumann, Leonie, 2021. "A model of weighted network formation," Theoretical Economics, Econometric Society, vol. 16(1), January.
    5. Péter Bayer & Ani Guerdjikova, 2020. "Optimism leads to optimality: Ambiguity in network formation," Working Papers hal-03005107, HAL.
    6. Deroian, F., 2009. "Endogenous link strength in directed communication networks," Mathematical Social Sciences, Elsevier, vol. 57(1), pages 110-116, January.
    7. Isabel Melguizo, 2023. "Group representation concerns and network formation," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 151-179, January.
    8. Kinateder, Markus & Merlino, Luca Paolo, 2022. "Local public goods with weighted link formation," Games and Economic Behavior, Elsevier, vol. 132(C), pages 316-327.
    9. Harmsen - van Hout, Marjolein J.W. & Herings, P. Jean-Jacques & Dellaert, Benedict G.C., 2013. "Communication network formation with link specificity and value transferability," European Journal of Operational Research, Elsevier, vol. 229(1), pages 199-211.
    10. Olaizola, Norma & Valenciano, Federico, 2014. "Asymmetric flow networks," European Journal of Operational Research, Elsevier, vol. 237(2), pages 566-579.
      • Olaizola Ortega, María Norma & Valenciano Llovera, Federico, 2012. "Asymmetric flow networks," IKERLANAK http://www-fae1-eao1-ehu-, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    11. Möhlmeier, Philipp & Rusinowska, Agnieszka & Tanimura, Emily, 2018. "Competition for the access to and use of information in networks," Mathematical Social Sciences, Elsevier, vol. 92(C), pages 48-63.
    12. Norma Olaizola & Federico Valenciano, 2016. "From bilateral two-way to unilateral one-way flow link-formation," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 7(2), pages 257-278, June.
    13. Galeotti, Andrea & Ghiglino, Christian & Squintani, Francesco, 2013. "Strategic information transmission networks," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1751-1769.
    14. Alan Griffith, 2022. "A continuous model of strong and weak ties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(6), pages 1519-1563, December.
    15. Francesco Feri & Miguel Meléndez-Jiménez, 2013. "Coordination in evolving networks with endogenous decay," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 955-1000, November.
    16. Norma Olaizola & Federico Valenciano, 2018. "A unifying model of strategic network formation," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(4), pages 1033-1063, November.
    17. Olaizola, By Norma & Valenciano, Federico, 2021. "Efficiency and stability in the connections model with heterogeneous nodes," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 490-503.
    18. Olaizola, Norma & Valenciano, Federico, 2020. "A connections model with decreasing returns link-formation technology," MPRA Paper 107585, University Library of Munich, Germany.
    19. Kenan Huremović, 2021. "A noncooperative model of contest network formation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(2), pages 275-317, April.
    20. Norma Olaizola & Federico Valenciano, 2010. "Information, Stability and Dynamics in Networks under Institutional Constraints," Working Papers 2010.128, Fondazione Eni Enrico Mattei.

    More about this item

    Keywords

    Networks; Connections model; Heterogeneity; Efficiency;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:114884. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.