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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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.
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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.
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