Network formation with closeness incentives
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Berno Buechel: Center for Mathematical Economics, Bielefeld University
Authors registered in the RePEc Author Service: Berno Büchel ()
No 395, Center for Mathematical Economics Working Papers from Center for Mathematical Economics, Bielefeld University
We study network formation in a strategic setting where every agent strives for short paths to the other agents. The main parameter of our model is the marginal rate of substitution between network benefits and linking costs. We provide boundaries of stable networks for increasing and decreasing marginal returns. The formulated model stands in strong relation to the famous connections model (Jackson & Wolinsky '96): we show that for certain parameter values both models induce the same network structures.
Keywords: Decreasing returns; Closeness centrality; Connections; Increasing returns; Networks (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:bie:wpaper:395
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