between 
 Heterogeneity 
 and 
 Decay 
 in 
 Two ‐ way 
 Flow 
 Models 
 
 


In this paper we examine the role played by heterogeneity in the popular “connections model” of Jackson andWolinsky (1996). We prove that under heterogeneity in values or decay involving only two degrees of freedom, all networks can supported as Nash. Moreover, we show that Nash networks may not always exist. In the absence of decay, neither result can be found in a model with value heterogeneity. Finally, we show that on reducing heterogeneity, both the earlier “anything goes” result and the non-existence problem disappear. JEL Classification: C72, D85.