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Title:Under-connected and over-connected networks PDF Logo
Authors:Hellmann, Tim
Buechel, Berno
Issue Date:2009
Series/Report no.:Nota di lavoro // Fondazione Eni Enrico Mattei: Sustainable development 38.2009
Abstract: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.
Subjects:Networks
Network Formation
Connections
Game Theory
Externalities
Spillovers
Stability
Efficiency
JEL:D85
C72
L14
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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