Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2004-03-15
Number: 04-031/1
Author-Name: Andrea Galeotti
Author-Email: galeotti@few.eur.nl
Author-Workplace-Name: Faculty of Economics, Erasmus Universiteit Rotterdam
Title: One-way Flow Networks: the Role of Heterogeneity
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.
Classification-JEL: D85; C72
Keywords: Networks; heterogeneity
File-Url: https://papers.tinbergen.nl/04031.pdf
File-Format: application/pdf
File-Size: 426245 bytes
Handle: RePEc:tin:wpaper:20040031