Network formation with closeness incentives
We study network formation in a strategic setting where every agent strives for short paths to the other agents. The main parameter of our model is the marginal rate of substitution between network benefits and linking costs. We provide boundaries of stable networks for increasing and decreasing marginal returns. The formulated model stands in strong relation to the famous connections model (Jackson and Wolinsky ‘96): we show that for certain parameter values both models induce the same network structures.
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- 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, 1995. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- 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.
- Antoni Calvó-Armengol & Rahmi İlkılıç, 2009.
"Pairwise-stability and Nash equilibria in network formation,"
International Journal of Game Theory,
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- Antoni Calvó-Armengol & Rahmi Ilkiliç, 2004. "Pairwise-Stability and Nash Equilibria in Network Formation," Working Papers 182, Barcelona Graduate School of Economics.
- Antoni Calvó-Armengol & Rahmi Ilkiliç, 2005. "Pairwise-Stability and Nash Equilibria in Network Formation," Working Papers 2005.34, Fondazione Eni Enrico Mattei.
- Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer, vol. 34(3), pages 319-349, October.
- Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006.
"Network formation with heterogeneous players,"
Games and Economic Behavior,
Elsevier, vol. 54(2), pages 353-372, February.
- K.J.M. De Jaegher & J.J.A. Kamphorst, 2008. "Network formation with decreasing marginal benefits of information," Working Papers 08-16, Utrecht School of Economics.
- Goyal, Sanjeev & Vega-Redondo, Fernando, 2007. "Structural holes in social networks," Journal of Economic Theory, Elsevier, vol. 137(1), pages 460-492, November.
- Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
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