Efficiency and stability in the connections model with heterogeneous nodes

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2021
Volume: 189
Issue: C
Pages: 490-503

Authors (2)

Score contribution per author:

1.009 = (α=2.02 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper studies the connections model (Jackson and Wolinsky, 1996) when nodes may have different values. It is shown that efficiency is reached by a strongly hierarchical structure that we call strong NSG-networks: Nested Split Graph networks where the hierarchy or ranking of nodes inherent in any such network is consistent with the rank of nodes according to their value, perhaps leaving some of the nodes with the lowest values disconnected. A simple algorithm is provided for calculating these efficient networks. We also introduce a natural extension of pairwise stability assuming that players are allowed to agree on how the cost of each link is split and prove that stability in this sense for connected strong NSG-networks entails efficiency.

Technical Details

RePEc Handle
repec:eee:jeborg:v:189:y:2021:i:c:p:490-503
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29