We investigate the impact of network structures describing reciprocal influence-relationships between agents on their perceived ambiguity. We argue that, under specific assumptions, the potential complexity of the link-structures creates extra uncertainty or ambiguity over the "right" probability distribution to consider. This result affects the optimal equilibrium structures which arise in a dynamic game where the agents/nodes strategically rewire their links to minimize the perceived uncertainty. The model could explain specific network dynamics observed in markets with asymmetric or not perfect information on the partners' outcomes. For instance, we propose an interpretation of the dynamic of the European Interbank Market structure before and after the recent financial crisis.
|Date of creation:||Feb 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Malet Street, London WC1E 7HX, UK|
Phone: 44-20- 76316429
Fax: 44-20- 76316416
Web page: http://www.ems.bbk.ac.uk/
|Order Information:|| Email: |
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. & van den Nouweland, Anne, 2002.
"Strongly Stable Networks,"
1147, California Institute of Technology, Division of the Humanities and Social Sciences.
- Matthew O. Jackson, 2001. "Strongly Stable Networks," University of Oregon Economics Department Working Papers 2001-3, University of Oregon Economics Department, revised 15 Nov 2002.
- Matthew O. Jackson & Anne van den Nouweland, 2002. "Strongly Stable Networks," Microeconomics 0211006, EconWPA.
- Yannis M. Ioannides & Linda Datcher Loury, 2004.
"Job Information Networks, Neighborhood Effects, and Inequality,"
Journal of Economic Literature,
American Economic Association, vol. 42(4), pages 1056-1093, December.
- Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.
- Flannery, Mark J, 1996.
"Financial Crises, Payment System Problems, and Discount Window Lending,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 28(4), pages 804-24, November.
- Mark J. Flannery, 1996. "Financial crises, payment system problems, and discount window lending," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 804-831.
- Nicolas Vieille & Eilon Solan & Dinah Rosenberg, 2009. "Informational externalities and emergence of consensus," Post-Print hal-00464565, HAL.
- Itzhak Gilboa & David Schmeidler, 1989.
"Maxmin Expected Utility with Non-Unique Prior,"
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2006.
"Ambiguity Aversion, Robustness, and the Variational Representation of Preferences,"
Econometric Society, vol. 74(6), pages 1447-1498, November.
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2004. "Ambiguity Aversion, Robustness, and the Variational Representation of Preferences," Carlo Alberto Notebooks 12, Collegio Carlo Alberto, revised 2006.
- Topa, Giorgio, 1997.
"Social Interactions, Local Spillovers and Unemployment,"
97-17, C.V. Starr Center for Applied Economics, New York University.
- Giorgio Topa, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 261-295.
- Kaivan Munshi, 2003. "Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(2), pages 549-599.
- Dutta, Bhaskar & Mutuswami, Suresh, 1997.
Journal of Economic Theory,
Elsevier, vol. 76(2), pages 322-344, October.
- Matthew O. Jackson & Asher Wolinsky, 1994.
"A Strategic Model of Social and Economic Networks,"
1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Harrison Hong & Jeffrey D. Kubik & Jeremy C. Stein, 2001.
"Social Interaction and Stock-Market Participation,"
NBER Working Papers
8358, National Bureau of Economic Research, Inc.
- Iori, G. & Reno, R. & de Masi, G. & Caldarelli, G., 2006.
"Trading strategies in the Italian interbank market,"
06/03, Department of Economics, City University London.
- Iori, Giulia & Renò, Roberto & De Masi, Giulia & Caldarelli, Guido, 2007. "Trading strategies in the Italian interbank market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 376(C), pages 467-479.
- Giulia Iori & Roberto Reno' & Giulia De Masi & Guido Caldarelli, 2006. "Trading strategies in the Italian interbank market," Papers physics/0611023, arXiv.org.
- Sujoy Mukerji & Peter Klibanoff, 2002.
"A Smooth Model of Decision,Making Under Ambiguity,"
Economics Series Working Papers
113, University of Oxford, Department of Economics.
- Gabrieli, S., 2012. "Too-connected versus too-big-to-fail: banks’ network centrality and overnight interest rates," Working papers 398, Banque de France.
- Upper, Christian & Worms, Andreas, 2002.
"Estimating Bilateral Exposures in the German Interbank Market: Is there a Danger of Contagion?,"
Discussion Paper Series 1: Economic Studies
2002,09, Deutsche Bundesbank, Research Centre.
- Upper, Christian & Worms, Andreas, 2004. "Estimating bilateral exposures in the German interbank market: Is there a danger of contagion?," European Economic Review, Elsevier, vol. 48(4), pages 827-849, August.
- Christian Upper & Andreas Worms, 2001. "Estimating bilateral exposures in the German interbank market: is there a danger of contagion?," BIS Papers chapters, in: Bank for International Settlements (ed.), Marrying the macro- and micro-prudential dimensions of financial stability, volume 1, pages 211-229 Bank for International Settlements.
- Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 815-842.
- Mueller-Frank, Manuel, 2013. "A general framework for rational learning in social networks," Theoretical Economics, Econometric Society, vol. 8(1), January.
- Daron Acemoglu & Munther A. Dahleh & Ilan Lobel & Asuman Ozdaglar, 2008.
"Bayesian Learning in Social Networks,"
NBER Working Papers
14040, National Bureau of Economic Research, Inc.
- Schmeidler, David, 1989.
"Subjective Probability and Expected Utility without Additivity,"
Econometric Society, vol. 57(3), pages 571-87, May.
- David Schmeidler, 1989. "Subjective Probability and Expected Utility without Additivity," Levine's Working Paper Archive 7662, David K. Levine.
- Gert Sabidussi, 1966. "The centrality index of a graph," Psychometrika, Springer;The Psychometric Society, vol. 31(4), pages 581-603, December.
- Emmanuel Saez & Esther Duflo, 2003. "The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment," Framed Field Experiments 00141, The Field Experiments Website.
- Ana Babus, 2007.
"The Formation of Financial Networks,"
2007.69, Fondazione Eni Enrico Mattei.
- Michael Boss & Helmut Elsinger & Martin Summer & Stefan Thurner, 2004. "Network topology of the interbank market," Quantitative Finance, Taylor & Francis Journals, vol. 4(6), pages 677-684.
- Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 319-349, October.
- Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2009. "Informational externalities and emergence of consensus," Games and Economic Behavior, Elsevier, vol. 66(2), pages 979-994, July.
- Lurie, Nicholas H, 2004. " Decision Making in Information-Rich Environments: The Role of Information Structure," Journal of Consumer Research, Oxford University Press, vol. 30(4), pages 473-86, March.
When requesting a correction, please mention this item's handle: RePEc:bbk:bbkefp:1303. 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: ()
If references are entirely missing, you can add them using this form.