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From Assortative to Dissortative Networks: The Role of Capacity Constraints

  • Michael D. K\"onig
  • Claudio J. Tessone


  • Yves Zenou

We consider a dynamic model of network formation where agents form and sever links based on the centrality of their potential partners. We show that the existence of capacity constrains in the amount of links an agent can maintain introduces a transition from dissortative to assortative networks. This effect can shed light on the distinction between technological and social networks as it gives a simple mechanism explaining how and why this transition occurs.

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Paper provided by ETH Zurich, Chair of Systems Design in its series Working Papers with number CCSS-10-012.

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Handle: RePEc:stz:wpaper:ccss-10-012
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  1. M. Koenig & Claudio J. Tessone & Yves Zenou, . "A Dynamic Model of Network Formation with Strategic Interactions," Working Papers CCSS-09-006, ETH Zurich, Chair of Systems Design.
  2. Antoni Calvo-Armengol & Eleonora Patacchini & Yves Zenou, 2008. "Peer Effects and Social Networks in Education," CReAM Discussion Paper Series 0814, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Sanjeev Goyal & Marco van der Leij & José Luis Moraga Gonzales, 2004. "Economics: An Emerging Small World?," CESifo Working Paper Series 1287, CESifo Group Munich.
  4. Coralio Ballester & Antoni Calvo-Armengol & Yves Zenou, 2005. "Who's Who in Networks. Wanted: the Key Player," NajEcon Working Paper Reviews 666156000000000586,
  5. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521857406.
  6. Antonio Cabrales & Àlex Arenas & Albert Díaz-Guilera & Roger Guimerà & Fernando Vega-Redondo, 2004. "Optimal Information Transmission in Organizations: Search and Congestion," Working Papers 2004.77, Fondazione Eni Enrico Mattei.
  7. Kimmo Soramaki & Morten L. Bech & Jeffrey Arnold & Robert J. Glass & Walter E. Beyeler, 2006. "The topology of interbank payment flows," Staff Reports 243, Federal Reserve Bank of New York.
  8. Guimera, R. & Danon, L. & Diaz-Guilera, A. & Giralt, F. & Arenas, A., 2006. "The real communication network behind the formal chart: Community structure in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 61(4), pages 653-667, December.
  9. Fernando Vega Redondo, 2002. "Building Up Social Capital In A Changing World," Working Papers. Serie AD 2002-26, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  10. Aouchiche, M. & Bell, F.K. & Cvetkovic, D. & Hansen, P. & Rowlinson, P. & Simic, S.K. & Stevanovic, D., 2008. "Variable neighborhood search for extremal graphs. 16. Some conjectures related to the largest eigenvalue of a graph," European Journal of Operational Research, Elsevier, vol. 191(3), pages 661-676, December.
  11. Fagiolo, Giorgio, 2005. "Endogenous neighborhood formation in a local coordination model with negative network externalities," Journal of Economic Dynamics and Control, Elsevier, vol. 29(1-2), pages 297-319, January.
  12. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521674096.
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