Advanced Search
MyIDEAS: Login

Communication Network Formation with Link Specificity and Value Transferability

Contents:

Author Info

  • Harmsen - van Hout, Marjolein J.W.

    ()
    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Herings, P. Jean-Jacques

    ()
    (Department of Economics, School of Business and Economics, Maastricht University)

  • Dellaert, Benedict G.C.

    ()
    (Department of Business Economics / Marketing Section, Erasmus School of Economics, Erasmus University Rotterdam)

Abstract

We propose a model on strategic formation of communication networks with (i) link specificity: the more direct links somebody maintains, the less she can specify her attention per link, the lower her links’ value, while this negative externality was previously ignored in the communication context, and (ii) value transferability via indirect links for informational but not for social value from communication, while this positive externality was modeled uniformly before. Assuming only social value to isolate the impact of link specificity, the pairwise stable set includes many nonstandard networks under high or particular combinations of fully connected components under low link specificity. Allowing for social and informational value, the joint effect of link specificity and value transferability reduces the stable set to certain fragmented networks under high or the complete network under low link specificity. These extremes are beneficial for efficiency, whereas quite inefficient networks may arise for intermediate link specificity.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.fcn.eonerc.rwth-aachen.de/global/show_document.asp?id=aaaaaaaaaagvvim
File Function: Full text
Download Restriction: no

Bibliographic Info

Paper provided by E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN) in its series FCN Working Papers with number 15/2010.

as in new window
Length: 34 pages
Date of creation: Nov 2010
Date of revision: Mar 2011
Handle: RePEc:ris:fcnwpa:2010_015

Contact details of provider:
Email:
Web page: http://www.eonerc.rwth-aachen.de/fcn
More information through EDIRC

Related research

Keywords: Bilateral communication links; Link specificity; Value transferability; Social vs. informational value; Strategic network formation;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. HERINGS, Jean-Jacques & MAULEON, Ana & VANNETELBOSCH, Vincent, 2006. "Farsightedly stable networks," CORE Discussion Papers 2006092, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. ELLEFLAMME, Paul & BLOCH, Francis, . "Market sharing agreements and collusive networks," CORE Discussion Papers RP -1711, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
  4. Harmsen - van Hout, Marjolein J.W. & Herings, P. Jean-Jacques & Dellaert, Benedict G.C., 2010. "The Structure of Online Consumer Communication Networks," FCN Working Papers 3/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  5. Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer, vol. 34(3), pages 319-349, October.
  6. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
  7. Frédéric Deroïan, 2006. "Endogenous Link Strength in Directed Communication Networks," Working Papers halshs-00410544, HAL.
  8. Lang, Joachim & Madlener, Reinhard, 2010. "Relevance of Risk Capital and Margining for the Valuation of Power Plants: Cash Requirements for Credit Risk Mitigation," FCN Working Papers 1/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  9. Sergio Currarini, 2006. "Network Design in Games with Spillovers," Working Papers 2006_16, Department of Economics, University of Venice "Ca' Foscari".
  10. Matthew O. Jackson & Asher Wolinsky, 1994. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Harmsen-van Hout Marjolein J.W. & Herings P. Jean-Jacques & Dellaert Benedict G.C., 2011. "Communication network formation with link specificity and value transferability," Research Memorandum 022, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  12. Goyal, Sanjeev & Vega-Redondo, Fernando, 2007. "Structural holes in social networks," Journal of Economic Theory, Elsevier, vol. 137(1), pages 460-492, November.
  13. Harmsen - van Hout, Marjolein J.W. & Dellaert, Benedict G.C. & Herings, P. Jean-Jacques, 2010. "Behavioral Effects in Individual Decisions of Network Formation: Complexity Reduces Payoff Orientation and Social Preferences," FCN Working Papers 5/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  14. Harmsen-van Hout Marjolein J.W. & Herings P. Jean-Jacques & Dellaert Benedict G.C., 2011. "Communication network formation with link specificity and value transferability," Research Memorandum 022, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  15. 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.
  16. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  17. Andrea Galeotti, 2010. "Talking, Searching, And Pricing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 1159-1174, November.
  18. Campbell, James F., 1994. "Integer programming formulations of discrete hub location problems," European Journal of Operational Research, Elsevier, vol. 72(2), pages 387-405, January.
  19. Kosfeld Michael, 2004. "Economic Networks in the Laboratory: A Survey," Review of Network Economics, De Gruyter, vol. 3(1), pages 1-23, March.
  20. Thayer Morrill, 2011. "Network formation under negative degree-based externalities," International Journal of Game Theory, Springer, vol. 40(2), pages 367-385, May.
  21. Charla Mathwick & Caroline Wiertz & Ko de Ruyter, 2008. "Social Capital Production in a Virtual P3 Community," Journal of Consumer Research, University of Chicago Press, vol. 34(6), pages 832-849, November.
  22. Monsuur, Herman, 2007. "Stable and emergent network topologies: A structural approach," European Journal of Operational Research, Elsevier, vol. 183(1), pages 432-441, November.
  23. Janssen, R.H.P. & Monsuur, H., 2012. "Stable network topologies using the notion of covering," European Journal of Operational Research, Elsevier, vol. 218(3), pages 755-763.
  24. Mark Granovetter, 2005. "The Impact of Social Structure on Economic Outcomes," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 33-50, Winter.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. 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.
  2. Achtnicht, Martin, 2010. "Do environmental benefits matter? A choice experiment among house owners in Germany," ZEW Discussion Papers 10-094, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Sorda, Giovanni & Sunak, Yasin & Madlener, Reinhard, 2011. "A Spatial MAS Simulation to Evaluate the Promotion of Electricity from Agricultural Biogas Plants in Germany," FCN Working Papers 1/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Oct 2012.
  4. Melchior, Tobias & Madlener, Reinhard, 2010. "Economic Evaluation of IGCC Plants with Hot Gas Cleaning," FCN Working Papers 22/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ris:fcnwpa:2010_015. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yasin Sunak).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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