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Endogenous Link Strength in Directed Communication Networks

  • Frédéric Deroïan

    ()

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université Paul Cézanne - Aix-Marseille 3 - Université de la Méditerranée - Aix-Marseille 2 - EHESS - École des hautes études en sciences sociales - CNRS - AMU - Aix-Marseille Université)

We present a model of communication network formation in which links'strengths are endogenously determined by individual incentives. Agents are endowed with a fixed amount of resource which they can distribute as they want in directed links. Individuals capture benefits from both direct and indirect access to others, in a way that takes into account the strength of each link. The wheel architecture is shown to be the unique efficient and stable architecture under mild restriction.

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Paper provided by HAL in its series Working Papers with number halshs-00410544.

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Date of creation: 2006
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Handle: RePEc:hal:wpaper:halshs-00410544
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00410544
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  1. Kim, Chongmin & Wong, Kam-Chau, 2007. "Network formation and stable equilibrium," Journal of Economic Theory, Elsevier, vol. 133(1), pages 536-549, March.
  2. Dutta, Bhaskar & Mutuswami, Suresh, 1996. "Stable Networks," Working Papers 971, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. 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.
  4. Falk, Armin & Kosfeld, Michael, 2003. "It's all about Connections: Evidence on Network Formation," IZA Discussion Papers 777, Institute for the Study of Labor (IZA).
  5. Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
  6. Matsubayashi, Nobuo & Yamakawa, Shigetaka, 2006. "A note on network formation with decay," Economics Letters, Elsevier, vol. 93(3), pages 387-392, December.
  7. Feri, Francesco, 2007. "Stochastic stability in networks with decay," Journal of Economic Theory, Elsevier, vol. 135(1), pages 442-457, July.
  8. Andrea Galeotti, 2006. "One-way flow networks: the role of heterogeneity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(1), pages 163-179, September.
  9. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
  10. Hojman, Daniel & Szeidl, Adam, 2006. "Core and Periphery in Endogenous Networks," Working Paper Series rwp06-022, Harvard University, John F. Kennedy School of Government.
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