From Exogenous to Endogenous Networks: Internet Applications

Alessio D'Ignazio and Emanuele Giovannetti

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Economic agents' behavior is affected by their position in a network, either exogenous or endogenous, in which they interact with a subset of neighbours only. The network's links, which may be generated by vertical and/or horizontal relations, or by more complex morphologies, may explain the transition between dynamic equilibria and the instability of economic aggregates. Moreover, networks shape strategic interaction among agents by determining their strategies; the problem of access and interconnection, particularly relevant in the Internet, is perhaps the best example. A two-way feedback between strategies and network structures arises instead when links are endogenous: those features are clearly shown in the mechanism underlying the formation of peering links and R & D networks.

Keywords: vertical restraints; network formation; Internet; peering (search for similar items in EconPapers)
JEL-codes: D85 L14 L42 L86 (search for similar items in EconPapers)
Pages: 52
Date: 2004-09
New Economics Papers: this item is included in nep-net
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0445

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