Networks as Public Infrastructure: Externalities, Efficiency, and Implementation
AbstractFirst a non-cooperative model of network formation is investigated where link formation is one-sided and information flow is two-way. For that model, the relationship between different notions of efficient networks is studied: Pareto optimal networks on the one hand and welfare maximizing networks on the other hand. Strategic network formation is compared with funding schemes for public goods. Second, we extend the model and review earlier findings how a pre-existing network affects existence of Nash equilibria and efficiency of Nash equilibrium outcomes of the strategic network formation game: It can foster or prohibit existence of Nash equilibria. It can improve or worsen equilibrium welfare. Finally, we treat the pre-existing network as public infrastructure and design and analyze a subscription game for the public provision of that infrastructure.
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 Virginia Polytechnic Institute and State University, Department of Economics in its series Working Papers with number e07-35.
Length: 28 pages
Date of creation: 2013
Date of revision:
Network externalities; Efficiency; Strategic network formation; Network extension; Implementation;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-10 (All new papers)
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.:
- SPRUMONT, Yves & MOULIN, Hervé, 2005.
"Fair Allocation of Production Externalities: Recent Results,"
Cahiers de recherche
2005-22, Universite de Montreal, Departement de sciences economiques.
- Hervé Moulin & Yves Sprumont, 2007. "Fair allocation of production externalities : recent results," Revue d'économie politique, Dalloz, vol. 0(1), pages 7-36.
- MOULIN, Hervé & SPRUMONT, Yves, 2005. "Fair Allocation of Production Externalities: Recent Results," Cahiers de recherche 28-2005, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Angeles de Frutos, M., 1998. "Decreasing Serial Cost Sharing under Economies of Scale," Journal of Economic Theory, Elsevier, vol. 79(2), pages 245-275, April.
- Eric Bahel & Christian Trudeau, 2011.
"A Discrete Cost Sharing Model with Technological Cooperation,"
e07-28, Virginia Polytechnic Institute and State University, Department of Economics.
- Eric Bahel & Christian Trudeau, 2013. "A discrete cost sharing model with technological cooperation," International Journal of Game Theory, Springer, vol. 42(2), pages 439-460, May.
- Calvo, Emilio & Santos, Juan Carlos, 2000. "A value for multichoice games," Mathematical Social Sciences, Elsevier, vol. 40(3), pages 341-354, November.
- Wang, YunTong, 1999. "The additivity and dummy axioms in the discrete cost sharing model," Economics Letters, Elsevier, vol. 64(2), pages 187-192, August.
- SPRUMONT, Yves, 2004.
"Nearly Serial Sharing Methods,"
Cahiers de recherche
17-2004, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Yves Sprumont, 2005. "On the Discrete Version of the Aumann-Shapley Cost-Sharing Method," Econometrica, Econometric Society, vol. 73(5), pages 1693-1712, 09.
- Hervé Moulin, 1995.
"On Additive Methods To Share Joint Costs,"
The Japanese Economic Review,
Japanese Economic Association, vol. 46(4), pages 303-332, December.
- Eric Bahel, 2011. "The implications of the ranking axiom for discrete cost sharing methods," International Journal of Game Theory, Springer, vol. 40(3), pages 551-589, August.
- Friedman, Eric & Moulin, Herve, 1999.
"Three Methods to Share Joint Costs or Surplus,"
Journal of Economic Theory,
Elsevier, vol. 87(2), pages 275-312, August.
- Yair Tauman & Naoki Watanabe, 2007. "The Shapley Value of a Patent Licensing Game: the Asymptotic Equivalence to Non-cooperative Results," Economic Theory, Springer, vol. 30(1), pages 135-149, January.
- Petrosjan, Leon & Zaccour, Georges, 2003. "Time-consistent Shapley value allocation of pollution cost reduction," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 381-398, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Djavad Salehi-Isfahani).
If references are entirely missing, you can add them using this form.