EconStor >
Universität Bielefeld >
Institute of Mathematical Economics (IMW), Universität Bielefeld >
Working Papers, Institute of Mathematical Economics, Universität Bielefeld >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/43816
  
Title:Convexity and complementarity in network formation: Implications for the structure of pairwise stable networks PDF Logo
Authors:Hellmann, Tim
Issue Date:2009
Series/Report no.:Working papers // Institute of Mathematical Economics 423
Abstract:This paper studies the properties of convexity (concavity) and strategic complements (substitutes) in network formation and the implications for the structure of pairwise stable networks. First, different definitions of convexity (concavity) in own links from the literature are put into the context of diminishing marginal utility of own links. Second, it is shown that there always exists a pairwise stable network as long as the utility function of each player satisfies convexity in own links and strategic complements. For network societies with a profile of utility functions satisfying concavity in own links and strategic complements, a local uniqueness property of pairwise stable networks is derived. The results do neither require any specification on the utility function nor any other additional assumptions such as homogeneity.
Subjects:Networks
Network formation
Game theory
Supermodularity
Increasing differences
Stability
Existence
Uniqueness
JEL:D85
C72
L14
Persistent Identifier of the first edition:urn:nbn:de:hbz:361-15973
Document Type:Working Paper
Appears in Collections:Working Papers, Institute of Mathematical Economics, Universität Bielefeld

Files in This Item:
File Description SizeFormat
616891741.pdf424.57 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/43816

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.