FEEM working papers "Note di lavoro"
2019.020
Date: 23/7/2019

On the Interaction between Small Decay, Agent Heterogeneity and Diameter of Minimal Strict Nash Networks in Two-way Flow Model: A Note


Authors: Banchongsan Charoensook (Adams College - Keimyung University)
JEL n.: C72, D85
Keywords: Network Formation, Strict Nash Network, Two-way Flow Network, Branching Network

Abstract

In this note, I study the roles of value heterogeneity - i.e., agents are heterogeneous in terms of values of nonrival information thay they possessed - in determining the shapes of two-way flow Strict Nash networks when small amount of decay is present. I do so by extending the two-way flow network with small decay of De Jaegher and Kamphorst (J ECON BEHAV ORGAN, 2015). Results of this extension shows that the effects of value heterogeneity on Strict Nash networks, when small decay is present, largely resemble the effects of heterogeneity in link formation cost - without decay - found in the literature. Another surprising finding is that value heterogeneity can extend the diameters of Strict Nash networks without changing any other properties. In the discussion section of this note, I relate this finding to two well-known concepts in the studies of social networks - small world and preferential attachment.

***

Suggested citation: Charensook, B. (2019), 'On the Interaction between Small Decay, Agent Heterogeneity and Diameter of Minimal Strict Nash Networks in Two-way Flow Model: A Note', Nota di Lavoro 20.2019, Milano, Italy: Fondazione Eni Enrico Mattei

Download file
Download file

FEEM Newsletter & Update

Subscribe to stay connected.

Your data will be processed by FEEM - Eni Enrico Mattei Foundation - Data Controller - to receive the Foundation's Newsletter & Update via e-mail. To send the requested information, the Data Controller uses e-mail sending service providers established in the U.S.A .: for this, your consent to the transfer of your email address to the U.S.A. is required, without which it will not be possible to comply with your request. We invite you to consult the complete information to obtain detailed information to protect your rights.