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Destabilizing segregation in friendship networks with farsighted agents

Author

Listed:
  • Luo, Chenghong

  • Mauleon, Ana

    (Université catholique de Louvain, LIDAM/CORE, Belgium)

  • Vannetelbosch, Vincent

    (Université catholique de Louvain, LIDAM/CORE, Belgium)

Abstract

We consider a model of friendship network formation based on de Marti and Zenou (2017) where individuals belong to two different communities and costs of forming links depend on community memberships. Once there are myopic and farsighted individuals in both communities, many inefficient friendship networks such as segregation, partial integration or partial assimilation become destabilized. In the case of low intra-community costs, either (for high inter-community costs) the network where the smaller community ends up being assimilated into the dominant community or (for low inter-community costs) the network where both communities are fully integrated is both stable and strongly efficient. In the case of intermediate intra-community costs, star networks with a myopic individual in the center are both stable and strongly efficient.

Suggested Citation

  • Luo, Chenghong & Mauleon, Ana & Vannetelbosch, Vincent, 2024. "Destabilizing segregation in friendship networks with farsighted agents," LIDAM Reprints CORE 3283, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:3283
    DOI: https://doi.org/10.1016/j.jebo.2024.03.012
    Note: In: Journal of Economic Behavior and Organization, 2024, vol. 221, p. 1-16
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    Cited by:

    1. Mauleon, Ana & Nanumyan, Mariam & Vannetelbosch, Vincent, 2025. "Dynamics of ideal efforts and consensus in a multi-layer network game," Mathematical Social Sciences, Elsevier, vol. 135(C).
    2. Mauleon, Ana & Nanumyan, Mariam & Vannetelbosch, Vincent, 2024. "Ideal efforts and consensus in a multi-layer network game," LIDAM Discussion Papers CORE 2024023, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General

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