Eight degrees of separation
AbstractThe paper presents a model of network formation where every connected couple give a contribution to the aggregate payoff, eventually discounted by their distance, and the resources are split between agents through the Myerson value. As equilibrium concept we adopt a refinement of pairwise stability. The only parameters are the number N of agents and a constant cost k for every agent to maintain any single link. This setup shows a wide multiplicity of equilibria, all of them connected, as k ranges over non trivial cases. We are able to show that, for any N, when the equilibrium is a tree (acyclical connected graph), which happens for high k, and there is no decay, the diameter of such a network never exceeds 8 (i.e. there are no two nodes with distance greater than 8). Adopting no decay and studying only trees, we facilitate the analysis but impose worst-case scenarios: we conjecture that the limit of 8 should apply for any possible non--empty equilibrium with any decay function.
Download InfoIf 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.
Bibliographic InfoPaper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2006_26.
Length: 22 pages
Date of creation: 2006
Date of revision:
Contact details of provider:
Postal: Cannaregio, S. Giobbe no 873 , 30121 Venezia
Web page: http://www.unive.it/dip.economia
More information through EDIRC
Network Formation; Myerson value;
Other versions of this item:
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
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.:
- Jackson, Matthew O., 1998.
"The Evolution of Social and Economic Networks,"
1044, California Institute of Technology, Division of the Humanities and Social Sciences.
- Paul Belleflamme & Francis Bloch, 2001.
"Market Sharing Agreements and Collusive Networks,"
443, Queen Mary, University of London, School of Economics and Finance.
- Belleflamme, Paul, 2004. "Market sharing agreements and collusive networks," Open Access publications from UniversitÃ© catholique de Louvain info:hdl:2078/17009, Université catholique de Louvain.
- (*), Anne van den Nouweland & Marco Slikker, 2000. "original papers : Network formation models with costs for establishing links," Review of Economic Design, Springer, vol. 5(3), pages 333-362.
- Navarro, Noemí & Perea, Andrés, .
"Bargaining in networks and the myerson value,"
Open Access publications from Universidad Carlos III de Madrid
info:hdl:10016/263, Universidad Carlos III de Madrid.
- 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.
- 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.
- Matthew O. Jackson & Asher Wolinsky, 1995. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Subhadip Chakrabarti & Robert Gilles, 2007.
Review of Economic Design,
Springer, vol. 11(1), pages 13-52, June.
- Qin, Cheng-Zhong, 1996. "Endogenous Formation of Cooperation Structures," Journal of Economic Theory, Elsevier, vol. 69(1), pages 218-226, April.
- Jackson, Matthew O., 2005.
"Allocation rules for network games,"
Games and Economic Behavior,
Elsevier, vol. 51(1), pages 128-154, April.
- Matthew O. Jackson, 2003. "Allocation Rules for Network Games," Game Theory and Information 0303010, EconWPA.
- Matthew O. Jackson, 2003. "Allocation Rules for Network Games," Working Papers 1160, California Institute of Technology, Division of the Humanities and Social Sciences.
- Matthew O. Jackson, 2003. "Allocation Rules for Network Games," Working Papers 2003.51, Fondazione Eni Enrico Mattei.
- Matthew O. Jackson & Brian W. Rogers, 2007. "Meeting Strangers and Friends of Friends: How Random Are Social Networks?," American Economic Review, American Economic Association, vol. 97(3), pages 890-915, June.
- Perez-Castrillo, David & Wettstein, David, 2001.
"Bidding for the Surplus : A Non-cooperative Approach to the Shapley Value,"
Journal of Economic Theory,
Elsevier, vol. 100(2), pages 274-294, October.
- David Pérez-Castrillo & David Wettstein, . "Bidding For The Surplus: A Non-Cooperative Approach To The Shapley Value," UFAE and IAE Working Papers 461.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Goyal, Sanjeev & Vega-Redondo, Fernando, 2007. "Structural holes in social networks," Journal of Economic Theory, Elsevier, vol. 137(1), pages 460-492, November.
- Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
- Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, vol. 57(1), pages 81-95, January.
- Jackson, Matthew O. & Rogers, Brian W., 2005.
"Search in the formation of large networks: How random are socially generated networks?,"
1216, California Institute of Technology, Division of the Humanities and Social Sciences.
- Matthew O. Jackson & Brian W. Rogers, 2005. "Search in the Formation of Large Networks: How Random are Socially Generated Networks?," Game Theory and Information 0503005, EconWPA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geraldine Ludbrook).
If references are entirely missing, you can add them using this form.