刊行物

PUBLICATIONS

Formation of Networks in a Context with Diversity

執筆者 Erik Darpö, Alvaro Domínguez, María Martín-Rodríguez
発行年月 2023年 1月
No. 2023-02
ダウンロード 391KB

内容紹介

We present a model analyzing the endogenous network formation prior to an infinite-horizon network bargaining game. We assume agents of two types with either one of two alternatives: connections among players of the same type are cheaper than among players of different type or vice versa. In this way, players not only need to consider the trade-off between more outside options and the costs of maintaining those additional links, but also what type of players they connect to. We characterize pairwise stable network structures through necessary and sufficient conditions, highlighting the role played by the way in which heterogeneous nodes are placed in the different components for the pairwise stability of the networks. Finally, we perform a welfare analysis, comparing the efficient structures with those that are stable.