In this paper, we analyze the cost allocation problem when a group of agents or nodes have to be connected to a source, and where the cost matrix describing the cost of connecting each pair of agents is not necessarily symmetric, thus extending the well-studied problem of minimum cost spanning tree games, where the costs are assumed to be symmetric. The focus is on rules which satisfy axioms re...

We consider platform competition for small users and a user group. One enjoys quality advantage the other benefits from favorable beliefs. study whether group mitigates users’ coordination problem—i.e., joining low-quality because they believe that would do same. find can facilitate on high-quality may choose to maintain dominance of one. Users’ utility is non-monotonic in proportion Finally, w...

We develop an equivalence between the equilibrium effects of incomplete information and those two behavioral distortions: myopia, or extra discounting future; anchoring current behavior to past behavior, as in models with habit persistence adjustment costs. show how these distortions depend on higher-order beliefs GE mechanisms, they can be disciplined by evidence expectations. finally illustra...

A technologiak egyre osszetettebbe valasaval ritka, hogy a vallalkozasok minden szukseges kompetenciaval rendelkeznek egy-egy sikeres innovacio megvalositasahoz. hianyzo ismeretek potlasa es valtozatosabb tudashoz valo hozzaferes erdekeben tudashalozatokba kapcsolodnak be, igy vonva be szervezeten kivuli szereplőket innovacios folyamataikba. Ezaltal teljesitmenyuk mar nemcsak belső erőforrasaik...

This paper considers the formation of risk-sharing networks. Following empirical findings, we build a model where pairs form links, but a population cannot coordinate links. As a benchmark, individuals commit to share monetary holdings equally with linked partners. We find efficient networks can (indirectly) connect all individuals and involve full insurance. But equilibrium networks connect fe...

Social network formation models are often compared by their network structures, which satisfy specific equilibrium or welfare properties. Here, we concentrate on welfare criteria and define properties of utility function which are causal for certain network structures. We hope the identification of different properties of utility function will enhance the understanding of the relationship of di...

Heterogeneity in Nash networks can arise due to differences in the following four variables: (i) the value of information held by agents, (ii) the rate at which information decays or loses its value as it traverses the network, (iii) the probability with which a links transmits information, and (iv) the cost of forming a link. In this paper we examine Nash networks, efficient networks and the e...

We develop a model where workers, anticipating the possibility of unemployment, invest in connections to access information about available jobs. The investment in connections is high when the job separation rate is moderate, otherwise the investment in connections is low. The response of network investment to labor market conditions generates novel predictions. In particular, the probability t...

Many social and economic networks emerge among actors that only partially observe the network when forming network ties. We ask: what types of network architectures form when actors have limited observation, and does limited observation lead to less effi cient structures? We report numerous results from a laboratory experiment that varies both network observation and the cost of forming links. ...