The effect of sequentiality and heterogeneity in network formation games

Liza Charroin ()

Working Papers from HAL

Abstract: In the benchmark model of Bala and Goyal (2000) on network formation, the equilibrium network is asymmetric and unfair as agents have different payoffs. While they are prominent in reality, asymmetric networks do not emerge in the lab mainly because of fairness concerns. We extend this model with a sequential linking decision process to ease coordination and with heterogeneous agents. Heterogeneity is introduced with the presence of a special agent who has either a higher monetary value or a different status. The equilibrium is asymmetric and unfair. Our experimental results show that thanks to sequentiality and fairness concerns, individuals coordinate on fair and efficient networks in homogeneous settings. Heterogeneity impacts the network formation process by increasing the asymmetry of networks but does not decrease the level of fairness nor efficiency.

Keywords: Network formation; sequentiality; heterogeneity; fairness; asymmetry (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cdm, nep-exp, nep-gth and nep-mic
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01368067v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://shs.hal.science/halshs-01368067v1/document (application/pdf)

Related works:
Working Paper: The effect of sequentiality and heterogeneity in network formation games (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-01368067

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().