Efficient Network Structures with Separable Heterogeneous Connection Costs

Babak Heydari, Mohsen Mosleh and Kia Dalili

Papers from arXiv.org

Abstract: We introduce a heterogeneous connection model for network formation to capture the effect of cost heterogeneity on the structure of efficient networks. In the proposed model, connection costs are assumed to be separable, which means the total connection cost for each agent is uniquely proportional to its degree. For these sets of networks, we provide the analytical solution for the efficient network and discuss stability impli- cations. We show that the efficient network exhibits a core-periphery structure, and for a given density, we find a lower bound for clustering coefficient of the efficient network.

Date: 2015-04, Revised 2015-12
New Economics Papers: this item is included in nep-gth and nep-net
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Citations: View citations in EconPapers (5)

Published in Economics Letters, Vol. 134, September 2015, 82-85

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