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Efficient Network Structures with Separable Heterogeneous Connection Costs

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  • Babak Heydari
  • Mohsen Mosleh
  • Kia Dalili

Abstract

We introduce a heterogeneous connection model for network formation to capture the effect of cost heterogeneity on the structure of efficient networks. In the proposed model, connection costs are assumed to be separable, which means the total connection cost for each agent is uniquely proportional to its degree. For these sets of networks, we provide the analytical solution for the efficient network and discuss stability impli- cations. We show that the efficient network exhibits a core-periphery structure, and for a given density, we find a lower bound for clustering coefficient of the efficient network.

Suggested Citation

  • Babak Heydari & Mohsen Mosleh & Kia Dalili, 2015. "Efficient Network Structures with Separable Heterogeneous Connection Costs," Papers 1504.06634, arXiv.org, revised Dec 2015.
  • Handle: RePEc:arx:papers:1504.06634
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    References listed on IDEAS

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    3. Carayol, Nicolas & Roux, Pascale, 2009. "Knowledge flows and the geography of networks: A strategic model of small world formation," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 414-427, August.
    4. Joost Vandenbossche & Thomas Demuynck, 2013. "Network Formation with Heterogeneous Agents and Absolute Friction," Computational Economics, Springer;Society for Computational Economics, vol. 42(1), pages 23-45, June.
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    Cited by:

    1. Babak Heydari & Mohsen Mosleh & Kia Dalili, 2016. "From Modular to Distributed Open Architectures: A Unified Decision Framework," Systems Engineering, John Wiley & Sons, vol. 19(3), pages 252-266, May.
    2. Ping Sun & Elena Parilina, 2022. "Impact of Utilities on the Structures of Stable Networks with Ordered Group Partitioning," Dynamic Games and Applications, Springer, vol. 12(4), pages 1131-1162, December.
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    4. Mohsen Mosleh & Peter Ludlow & Babak Heydari, 2016. "Distributed Resource Management in Systems of Systems: An Architecture Perspective," Systems Engineering, John Wiley & Sons, vol. 19(4), pages 362-374, July.

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