Communication network formation with link specificity and value transferability

Marjolein Harmsen - van Hout (), P. Jean-Jacques Herings and Benedict Dellaert

European Journal of Operational Research, 2013, vol. 229, issue 1, 199-211

Abstract: We model strategic communication network formation with (i) link specificity: link maintenance lowers specific attention and thus value (negative externality previously ignored for communication) and (ii) value transferability via indirect links for informational but not for social value (positive externality modeled uniformly before). Assuming only social value, the pairwise stable set includes many nonstandard networks under high and particular combinations of complete components under low link specificity. Allowing for social and informational value reduces this set to certain fragmented networks under high and the complete network under low link specificity. These extremes are efficient, whereas intermediate link specificity generates inefficiency.

Keywords: Bilateral communication links; Link specificity; Value transferability; Social vs. informational value; Strategic network formation (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Communication Network Formation with Link Specificity and Value Transferability (2011)
Working Paper: Communication network formation with link specificity and value transferability (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:229:y:2013:i:1:p:199-211

DOI: 10.1016/j.ejor.2013.02.028

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