Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73514
Authors: 
Feri, Francesco
Meléndez-Jiménez, Miguel A.
Year of Publication: 
2009
Series/Report no.: 
Working Papers in Economics and Statistics 2009-19
Abstract: 
This paper studies an evolutionary model of network formation with endogenous decay, in which agents benefit both from direct and indirect connections. In addition to forming (costly) links, agents choose actions for a coordination game that determines the level of decay of each link. We address the issues of coordination (long-run equilibrium selection) and network formation by means of stochastic stability techniques. We find that both the link cost and the trade-off between efficiency and risk-dominance play a crucial role in the long-run behavior of the system.
Subjects: 
Coordination
Networks
Risk dominance
stochastic stability
JEL: 
C72
C73
D83
D85
Document Type: 
Working Paper

Files in This Item:
File
Size
510.71 kB





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