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Choosing `Me' and `My Friends': Identity in a Non-Cooperative Network Formation Game with Cost Sharing

  • Dev, Pritha
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    This paper introduces the choice of identity characteristics, and, commitments to these characteristics, in a network formation model where links costs are shared. Players want to link to the largest group given that linking costs are decreasing (increasing) in commitments for same (different) identity. We study conditions under which these choices allow for networks with multiple identities. We find that whether the choice of identity itself gives any utility or not, there will be Nash networks featuring multiple identities. Moreover, if the choice of identity directly adds utility, networks with multiple identities will be efficient and survive the dynamic process.

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    File URL: https://mpra.ub.uni-muenchen.de/21631/1/MPRA_paper_21631.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 21631.

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    Date of creation: Mar 2010
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    Handle: RePEc:pra:mprapa:21631
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    1. Goyal, Sanjeev & Vega-Redondo, Fernando, 2005. "Network formation and social coordination," Games and Economic Behavior, Elsevier, vol. 50(2), pages 178-207, February.
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    14. 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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    17. 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.
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    20. Rachel E. Kranton & Deborah F. Minehart, 2001. "A Theory of Buyer-Seller Networks," American Economic Review, American Economic Association, vol. 91(3), pages 485-508, June.
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