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Master Thesis

On the sequential formation of networks

Abstract : The network formation model described in this research paper is based on the connection model of Bala and Goyal. We extend this model by introducing two properties: heterogeneity of players and sequentiality of the network formation process. These two characteristics modify the emergence of equilibrium and efficient networks. Our main theoretical finding is that sequentiality is the main determinant of the equilibrium network while heterogeneity is secondary. The equilibrium often requires that the last player of the game incurs a large part of the linking costs. On the contrary, the leader does not create links at the equilibrium. In the following of the paper we build an experimental protocol. Our purpose is to analyse whether our model predicts be-haviour in the laboratory and whether individuals are more attracted by the equilibrium or by efficiency.
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Master Thesis
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https://dumas.ccsd.cnrs.fr/dumas-01074754
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Submitted on : Wednesday, October 15, 2014 - 1:39:36 PM
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  • HAL Id : dumas-01074754, version 1

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Liza Charroin. On the sequential formation of networks. Economics and Finance. 2014. ⟨dumas-01074754⟩

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