One-way Flow Networks: the Role of Heterogeneity

Andrea Galeotti

No 04-031/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: I study a one-way flow connections model in which players are heterogeneous with respect to values and the costs of establishing a link. I first show that values and costs asymmetries are crucial in determining the level of connectedness of a network. Interestingly, unconnected equilibria are asymmetric and central players may emerge. Second, I show that non-singleton components have a wheel architecture as far as the costs of linking are not partner specific. Otherwise also the flower architecture constitutes an equilibrium. I interpret these results as saying that asymmetric connections across players are a peculiar feature of homogeneous environments; by contrast, in heterogeneous settings players hold asymmetric connections, which are accompanied by the emergence of central players.

Keywords: Networks; heterogeneity (search for similar items in EconPapers)
JEL-codes: C72 D85 (search for similar items in EconPapers)
Date: 2004-03-15
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Related works:
Journal Article: One-way flow networks: the role of heterogeneity (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20040031

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