LARROSA Juan Manuel Ceferino
congresos y reuniones científicas
Network Formation with Heterogeneous Agents
LARROSA, JUAN M.C.; TOHMÉ, FERNANDO
Congreso; XXXVII Reunión Anual de la Asociación Argentina de Economía Política; 2002
AAEP - Univ. Nac. de Tucumán
The present paper analyzes a network formation problem [Bala-Goyal 2000]. We take as assumptions two crucial aspects. First, we assume that connecting to an agent pays off not only for the number of connections that the agent can provide but also for her intrinsic value, introducing heterogeneity in the framework. Second, we assume that each path connecting two agents has an associated cost which is the sum of the number of edges it includes. We obtain as a result that the only Nash structure is the circle network, which emerges as a socially and individually robust and optimal structure.