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

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Listed author(s):
  • Dev, Pritha
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    Abstract

    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
    Handle: RePEc:pra:mprapa:21631
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    Keywords: Identity; Network Formation; Cost Sharing Links;

    Find related papers by JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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    Cited by:

    1. Olaizola Ortega, María Norma & Valenciano Llovera, Federico, 2011. "Network formation under institutional constraints," IKERLANAK 2011-51, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.

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