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Networks of Relations

Giancarlo Spagnolo and Steffen Lippert ()

No 570, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: We model networks of relational (or implicit)contracts, exploring how sanctioning power and equilibrium conditions change under different network configurations and information transmission technologies. In our model, relations are the links, and the value of the network lies in its ability to enforce cooperative agreements that could not be sustained if agents had no access to other network members’ sanctioning power and information. We identify conditions for network stability and in-network information transmission as well as conditions under which stable subnetworks inhibit more valuable larger networks.

Keywords: Networks; Relational Contracts; Peering; Indirect Multimarket Contact; Information transmission; Social Capital. (search for similar items in EconPapers)
JEL-codes: D23 D43 L13 L29 O17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-net
Date: 2004-11-27, Revised 2010-06-04
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Related works:
Journal Article: Networks of relations and Word-of-Mouth Communication (2011) Downloads
Working Paper: Networks of Relations and Social Capital (2005) Downloads
Working Paper: Networks of Relations (2004) Downloads
Working Paper: Networks of Relations (2004) Downloads
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