Dogan, Gönül van Assen, M.A.L.M. van de Rijt, Arnout Buskens, Vincent
Year of Publication:
Nota di Lavoro No. 66.2007
This paper develops a formal model of exchange network stability that combines expected value theory (Friedkin 1995) with the economic literature on network dynamics. We identify stable networks up to size 8 for varying costs and investigate whether they are Pareto efficient and egalitarian. Only a very small number of networks are stable. Odd cycles and networks consisting of dyads and at most one isolate are the only egalitarian, efficient, and stable networks for a large cost range. We show that some of these results are generalizable to networks of any size and are independent of using expected value theory.
Exchange Networks Stability Efficiency Equity Social Dilemma