Coordination in evolving networks with endogenous decay

Francesco Feri and Miguel Meléndez-Jiménez ()

Journal of Evolutionary Economics, 2013, vol. 23, issue 5, 955-1000

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 the long-run behavior of the system depends on a fine interplay of the link cost and the trade-off between efficiency and risk-dominance. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Coordination; Networks; Risk-dominance; Stochastic stability; C72; C73; D83; D85 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (11)

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Working Paper: Coordination in Evolving Networks with Endogenous Decay (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:joevec:v:23:y:2013:i:5:p:955-1000

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DOI: 10.1007/s00191-013-0313-9

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