The Stability of Exchange Networks

Gönül Dogan, M.A.L.M. van Assen, Arnout van de Rijt and Vincent Buskens
Additional contact information
Gönül Dogan: Tilburg University
M.A.L.M. van Assen: Tilburg University
Arnout van de Rijt: Cornell University
Vincent Buskens: Utrecht University

No 2007.66, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper develops a formal model of exchange network stability that combines expected value theory (Friedkin 1995) with the economic literature on network dynamics. We identify stable networks up to size 8 for varying costs and investigate whether they are Pareto efficient and egalitarian. Only a very small number of networks are stable. Odd cycles and networks consisting of dyads and at most one isolate are the only egalitarian, efficient, and stable networks for a large cost range. We show that some of these results are generalizable to networks of any size and are independent of using expected value theory.

Keywords: Exchange Networks; Stability; Efficiency; Equity; Social Dilemma (search for similar items in EconPapers)
JEL-codes: D85 (search for similar items in EconPapers)
Date: 2007-06
New Economics Papers: this item is included in nep-gth, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2007.66

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