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# Under-connected and over-connected networks

Buechel B, Hellmann T (2008)
Working Papers. Institute of Mathematical Economics, 400. Bielefeld: Universität Bielefeld.
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Working Paper | Published | English

Authors
;
Department
Institut für mathematische Wirtschaftsforschung
Abstract

Since the seminal contribution of Jackson & Wolinsky 1996 [A Strategic Model of Social and Economic Networks, JET 71, 44-74] it has been widely acknowledged that the formation of social networks exhibits a general conflict between individual strategic behavior and collective outcome. What has not been studied systematically are the sources of inefficiency. We approach this gap by analyzing the role of positive and negative externalities of link formation. We find general results that relate situations of positive externalities with stable networks that cannot be "too dense" in a well-defined sense, while situations with negative externalities, tend to induce "too dense" networks.

Keywords
Network formation ; Networks ; Connections ; Game theory ; Spillovers ; Externalities ; Stability ; Efficiency
Year
2008
ISSN
0931-6558
File Name
400.pdf 324.70 KB
Access Level
Open Access

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##### Cite this
Buechel B, Hellmann T. Under-connected and over-connected networks. Working Papers. Institute of Mathematical Economics. Vol 400. Bielefeld: Universität Bielefeld; 2008.
Buechel, B., & Hellmann, T. (2008). Under-connected and over-connected networks (Working Papers. Institute of Mathematical Economics, 400) . Bielefeld: Universität Bielefeld.
Buechel, B., and Hellmann, T. (2008). Under-connected and over-connected networks. Working Papers. Institute of Mathematical Economics, 400, Bielefeld: Universität Bielefeld.
Buechel, B., & Hellmann, T., 2008. Under-connected and over-connected networks, Working Papers. Institute of Mathematical Economics, no.400, Bielefeld: Universität Bielefeld.
B. Buechel and T. Hellmann, Under-connected and over-connected networks, Working Papers. Institute of Mathematical Economics, vol. 400, Bielefeld: Universität Bielefeld, 2008.
Buechel, B., Hellmann, T.: Under-connected and over-connected networks. Working Papers. Institute of Mathematical Economics, 400. Universität Bielefeld, Bielefeld (2008).
Buechel, Berno, and Hellmann, Tim. Under-connected and over-connected networks. Bielefeld: Universität Bielefeld, 2008. Working Papers. Institute of Mathematical Economics. 400.
@misc{2315804,
abstract     = {Since the seminal contribution of Jackson \& Wolinsky 1996 [A Strategic Model of Social and Economic Networks, JET 71, 44-74] it has been widely acknowledged that the formation of social networks exhibits a general conflict between individual strategic behavior and collective outcome. What has not been studied systematically are the sources of inefficiency. We approach this gap by analyzing the role of positive and negative externalities of link formation. We find general results that relate situations of positive externalities with stable networks that cannot be {\textacutedbl}too dense{\textacutedbl} in a well-defined sense, while situations with negative externalities, tend to induce {\textacutedbl}too dense{\textacutedbl} networks.},
author       = {Buechel, Berno and Hellmann, Tim},
issn         = {0931-6558},
language     = {English},
publisher    = {Universit{\"a}t Bielefeld},
title        = {Under-connected and over-connected networks},
url          = {http://www.imw.uni-bielefeld.de/papers/files/imw-wp-400.pdf},
volume       = {400},
year         = {2008},
}


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AB  - Since the seminal contribution of Jackson & Wolinsky 1996 [A Strategic Model of Social and Economic Networks, JET 71, 44-74] it has been widely acknowledged that the formation of social networks exhibits a general conflict between individual strategic behavior and collective outcome. What has not been studied systematically are the sources of inefficiency. We approach this gap by analyzing the role of positive and negative externalities of link formation. We find general results that relate situations of positive externalities with stable networks that cannot be "too dense" in a well-defined sense, while situations with negative externalities, tend to induce "too dense" networks.
AU  - Buechel, Berno
AU  - Hellmann, Tim
ID  - 2315804
KW  - Network formation
KW  - Networks
KW  - Connections
KW  - Game theory
KW  - Spillovers
KW  - Externalities
KW  - Stability
KW  - Efficiency
PB  - Universität Bielefeld
PY  - 2008
SN  - 0931-6558
TI  - Under-connected and over-connected networks
U3  - PUB:ID 2315804
UR  - http://nbn-resolving.de/urn:nbn:de:hbz:361-13569
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