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Partner Heterogeneity Increases the Set of Strict Nash Networks

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  • Sudipta Sarangi
  • Pascal Billand
  • Christophe Bravard

Abstract

Galeotti et al. (2006, [2]) show that all minimal networks can be strict Nash in two-way flow models with full parameter heterogeneity while only inward pointing stars and the empty network can be strict Nash in the homogeneous parameter model of Bala and Goyal (2000, [1]). In this note we show that the introduction of partner heterogeneity plays a major role in substantially increasing the set of strict Nash equilibria.

Suggested Citation

  • Sudipta Sarangi & Pascal Billand & Christophe Bravard, 2009. "Partner Heterogeneity Increases the Set of Strict Nash Networks," Departmental Working Papers 2009-10, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2009-10
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    File URL: https://www.lsu.edu/business/economics/files/workingpapers/pap09_10.pdf
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    References listed on IDEAS

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    1. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
    2. 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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