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664
The Evolution of Social and Economic Networks
- JOURNAL OF ECONOMIC THEORY 106, 265–295
, 2002
"... We examine the dynamic formation and stochastic evolution of networks connecting individuals. The payoff to an individual from an economic or social activity depends on the network of connections among individuals. Over time individuals form and sever links connecting themselves to other individuals ..."
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Cited by 889 (37 self)
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We examine the dynamic formation and stochastic evolution of networks connecting individuals. The payoff to an individual from an economic or social activity depends on the network of connections among individuals. Over time individuals form and sever links connecting themselves to other individuals based on the improvement that the resulting network offers them relative to the current network. In addition to intended changes in the network there is a small probability of unintended changes or errors. Predictions can be made regarding the likelihood that the stochastic process will lead to any given network at some time, where the stochastic process selects from among the statically stable networks and cycles. We apply these results to examples including the Gale–Shapley marriage problem. Thus the paper achieves two goals. First, it outlines a dynamic solution concept for networks. Second, it applies this concept to matching problems.
A Survey of Models of Network Formation: Stability and Efficiency
, 2003
"... I survey the recent literature on the formation of networks. I provide definitions of network games, a number of examples of models from the literature, and discuss some of what is known about the (in)compatibility of overall societal welfare with individual incentives to form and sever links. ..."
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Cited by 319 (17 self)
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I survey the recent literature on the formation of networks. I provide definitions of network games, a number of examples of models from the literature, and discuss some of what is known about the (in)compatibility of overall societal welfare with individual incentives to form and sever links.
Learning About a New Technology: Pineapple
- Yale University
, 2000
"... This paper investigates the role of social learning in the diffusion of a new agricultural technology in Ghana. We use unique data on farmers ’ communication patterns to define each individual’s information neighborhood, the set of others from whom he might learn. Our empirical strategy is to test w ..."
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Cited by 241 (8 self)
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This paper investigates the role of social learning in the diffusion of a new agricultural technology in Ghana. We use unique data on farmers ’ communication patterns to define each individual’s information neighborhood, the set of others from whom he might learn. Our empirical strategy is to test whether farmers adjust their inputs to align with those of their information neighbors who were surprisingly successful in previous periods. We present evidence that farmers adopt surprisingly successful information neighbors ’ practices, conditional on many potentially confounding factors including common growing conditions, credit arrangements, clan membership, and religion. The relationship of these input adjustments to experience further supports their interpretation as resulting from social learning. In ad-The authors have benefittedfromtheadviceofRichardAkresh,Federico Bandi, Alan Bester, Dirk Bergemann,
A Theory of Buyer-Seller Networks
- American Economic Review
, 2001
"... This paper introduces a new model of exchange: networks, rather than markets, of buyers and sellers. It begins with the empirically motivated premise that a buyer and seller must have a relationship, a “link, ” to exchange goods. Networks- buyers, sellers, and the pattern of links connecting them- a ..."
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Cited by 155 (0 self)
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This paper introduces a new model of exchange: networks, rather than markets, of buyers and sellers. It begins with the empirically motivated premise that a buyer and seller must have a relationship, a “link, ” to exchange goods. Networks- buyers, sellers, and the pattern of links connecting them- are common exchange environments. This paper develops a methodology to study network structures and explains why agents may form networks. In a model that captures characteristics of a variety of industries, the paper shows that buyers and sellers, acting strategically in their own self-interests, can form the network structures that maximize overall
The price of selfish behavior in bilateral network formation
- In Proceedings of the twenty-fourth annual ACM symposium on Principles of distributed computing
, 2005
"... Given a collection of selfish agents who wish to establish links to route traffic among themselves, the set of equilibrium network topologies may appear quite different from the centrally enforced optimum. We study the quality (price of anarchy) of equilib-rium networks in a game where links require ..."
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Cited by 75 (0 self)
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Given a collection of selfish agents who wish to establish links to route traffic among themselves, the set of equilibrium network topologies may appear quite different from the centrally enforced optimum. We study the quality (price of anarchy) of equilib-rium networks in a game where links require the consent of both participants and are negotiated bilaterally, and compare these networks to those generated by an earlier model due to Fabrikant et al. [10] in which links are formed unilaterally. We provide a partial characterization of stable and efficient networks in the bi-lateral network formation game, and provide examples of stable networks that are not Nash graphs in the unilateral game. We develop an upper and lower bound on the price of anarchy of the bilateral game. An empirical analysis demonstrates that the av-erage price of anarchy is better in the bilateral connection game
The Stability and Efficiency of Economic and Social Networks
- ADVANCES IN ECONOMIC DESIGN, EDITED BY S. KORAY AND M. SERTEL
, 2003
"... This paper studies the formation of networks among individuals. The focus is on the compatibility of overall societal welfare with individual incentives to form and sever links. The paper reviews and synthesizes some previous results on the subject, and also provides new results on the existence of ..."
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Cited by 66 (13 self)
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This paper studies the formation of networks among individuals. The focus is on the compatibility of overall societal welfare with individual incentives to form and sever links. The paper reviews and synthesizes some previous results on the subject, and also provides new results on the existence of pairwise-stable networks and the relationship between pairwise stable and efficient networks in a variety of contexts and under several definitions of efficiency.
Bargaining, mergers, and technology choice in bilaterally oligopolistic industries.
- RAND J. Econom.
, 2003
"... Abstract This paper discusses the interaction of upstream and downstream market structure and technology choice in a bilaterally oligopolistic industry. The distribution of industry profits is determined by bilateral bargaining over contingent contracts, which is shown to generate the Shapley value ..."
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Cited by 65 (1 self)
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Abstract This paper discusses the interaction of upstream and downstream market structure and technology choice in a bilaterally oligopolistic industry. The distribution of industry profits is determined by bilateral bargaining over contingent contracts, which is shown to generate the Shapley value. Our analysis proceeds in three steps. First, analyzing the implication of market structure for the distribution of industry profits, we find that downstream mergers are more likely (less likely) if upstream firms have increasing (decreasing) unit costs, while upstream mergers are more likely (less likely) if supplies are substitutes (complements). Second, exploring how market structure affects upstream technology choice, we find that an upstream (downstream) merger reduces (increases) the focus on marginal cost reduction. Third, we show that downstream firms may strategically choose a particular market structure to affect upstream technology choice. One of the key applications of our setting is to cross-country retailer mergers, which -as we show-may increase welfare by affecting suppliers' choice of technology. 2
Coalition Formation as a Dynamic Process
- Journal of Economic Theory
, 2001
"... this paper. At the same time, our core characterization isn't exactly old wine in a new bottle. To appreciate this, notice that Theorems 2 and 3 would also have gone through if we were to take # very close to zero rather than unity. The reason is simple: when # =0 we have the purely myopic ca ..."
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Cited by 63 (4 self)
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this paper. At the same time, our core characterization isn't exactly old wine in a new bottle. To appreciate this, notice that Theorems 2 and 3 would also have gone through if we were to take # very close to zero rather than unity. The reason is simple: when # =0 we have the purely myopic case in which the short-sighted blocking intuitions of the core apply straightforwardly. But --- as stated more than once --- the novelty of the present case is the results hold when discountingvaniJQ . It is therefore not surprising to find that a deterministic EPCF (with # close to 1) may rule out non-core allocations in ways that are strikingly di#erent from those suggested by the standard definition of the core does. To appreciate this, consider the following example
2004) Social Networks and Crime Decisions: The Role of Social Structure in Facilitating Delinquent
- Behavior, International Economic Review
"... We develop a model in which delinquents compete with each other in criminal activities but may benefit from being friends with other criminals by learning and acquiring proper know-how on the crime business. By taking the social network connecting agents as given, we study the subgame perfect Nash e ..."
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Cited by 62 (15 self)
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We develop a model in which delinquents compete with each other in criminal activities but may benefit from being friends with other criminals by learning and acquiring proper know-how on the crime business. By taking the social network connecting agents as given, we study the subgame perfect Nash equilibrium of this game in which individuals decide first to work or to become a criminal and then the crime effort provided if criminals. We show that this game always has a pure strategy subgame perfect Nash equilibrium that we characterize. Ex ante identical individuals connected through a network can end up with very different equilibrium outcomes: either employed, or isolated criminal or criminals in networks. We also show that multiple equilibria with different number of active criminals and levels of involvement in crime activities may coexist and are only driven by the geometry of the pattern of links connecting criminals. Using the equilibrium concept of pairwise-stable networks, we then show that the multiplicity of equilibrium outcomes
Core in a Simple Coalition Formation Game
- Social Choice and Welfare
, 1998
"... We analyze the core of a class of coalition formation game in which every player's payoff depends only on the members of her coalition. We first consider anonymous games and additively separable games. Neither of these strong properties guarantee the existence of a core allocation, even if addi ..."
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Cited by 60 (1 self)
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We analyze the core of a class of coalition formation game in which every player's payoff depends only on the members of her coalition. We first consider anonymous games and additively separable games. Neither of these strong properties guarantee the existence of a core allocation, even if additional strong properties are imposed. We then introduce two top-coalition properties each of which guarantee the existence. We show that these properties are independent of the Scarf-balancedness condition. Finally we give several economic applications.