On the Interaction between Player Heterogeneity and Partner Heterogeneity in Two-way Flow Strict Nash Networks

Banchongsan Charoensook

No 2015.44, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper brings together analyses of two-way flow Strict Nash networks under exclusive player heterogeneity assumption and exclusive partner heterogeneity assumption. This is achieved through examining how the interactions between these two assumptions influence important properties of Strict Nash networks. Built upon the findings of Billand et al (2011) and Galleotti et al (2006), which assume exclusive partner heterogeneity and exclusive player heterogeneity respectively, I provide a proposition that generalizes the results of these two models by stating that: (i) Strict Nash network consists of multiple non-empty components as in Galleotti et al (2006), and (ii) each non-empty component is a branching or Bi network as in Billand et al (2011). This proposition requires that a certain restriction on link formation cost (called Uniform Partner Ranking), which encloses exclusive partner heterogeneity and exclusive player heterogeneity as a specific case, is satisfied. In addition, this paper shows that value heterogeneity plays a relatively less important role in changing the shapes of Strict Nash networks.

Keywords: Network Formation; Strict Nash Network; Two-way Flow Network; Branching Network; Agent Heterogeneity (search for similar items in EconPapers)
JEL-codes: C72 D85 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-gth, nep-mic and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: On the Interaction between Player Heterogeneity and Partner Heterogeneity in Two-way Flow Strict Nash Networks (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2015.44

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