Under-connected and over-connected networks

Arbeitspapier

Since the seminal contribution of Jackson & Wolinsky 1996 [A Strategic Model of Social and Economic Networks, JET 71, 44-74] it has been widely acknowledged that the formation of social networks exhibits a general conflict between individual strategic behavior and collective outcome. What has not been studied systematically are the sources of inefficiency. We approach this omission by analyzing the role of positive and negative externalities of link formation. This yields general results that relate situations of positive externalities with stable networks that cannot be too dense in a well-defined sense, while situations with negative externalities tend to induce too dense networks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 38.2009

Classification and Topics

• Classification: Wirtschaft ; Network Formation and Analysis: Theory ; Noncooperative Games ; Transactional Relationships; Contracts and Reputation; Networks
• Subject: Networks ; Network Formation ; Connections ; Game Theory ; Externalities ; Spillovers ; Stability ; Efficiency

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hellmann, Tim ; Buechel, Berno
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/53194
• Last update: 10.03.2025, 11:41 AM CET