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The Strength of Local Structures in Decentralized Network Formation

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  • Jose M. Betancourt

Abstract

I study dynamic network formation games in which agents meet stochastically and form links based on their valuation of the network. I show that these games can be represented in terms of the values agents assign to network sub-structures. Particularly, this characterizes potential games as those where all participants in a structure value it equally. When valuations are restricted to a finite set of repeated sub-structures, or motifs, the model exhibits phase transitions: small changes in motif values cause discontinuous shifts in network density.

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  • Jose M. Betancourt, 2025. "The Strength of Local Structures in Decentralized Network Formation," Papers 2510.10997, arXiv.org, revised Nov 2025.
    • Handle: RePEc:arx:papers:2510.10997
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    References listed on IDEAS

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    1. Yann Bramoullé & Andrea Galeotti & Brian Rogers, 2016. "The Oxford Handbook of the Economics of Networks," Post-Print hal-01447842, HAL.
    2. Yann Bramoullé & Andrea Galeotti & Brian Rogers, 2016. "The Oxford Handbook of the Economics of Networks," Post-Print hal-03572533, HAL.
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