This paper addresses the existence of Nash networks for the one-way flow model of Bala and Goyal (2000) in a number of different settings. We provide conditions for the existence of Nash networks in models where costs and values of links are heterogeneous and players obtain resources from others through the directed path between them. We find that costs of establishing links play a vital role i...

We study a model of multi-player communication. Privately informed decision makers have different preferences about the actions they take, and communicate to influence each others’ actions in their favor. We prove that the equilibrium capability of any player to send a truthful message to a set of players depends not only on the preference composition of those players, but also on the number of...

I examine a dynamic model of network formation in which individuals use reinforcement learning to choose their actions. Typically, economic models of network formation assume the entire network structure to be known to all individuals involved. The introduction of reinforcement learning allows us to relax this assumption. Q-learning is a reinforcement learning algorithm from the artificial inte...

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 heterogenei...

Can we identify the members of a community who are bestplaced to diffuse information simply by asking a random sample of individuals? We show that boundedly-rational individuals can, simply by tracking sources of gossip, identify those who are most central in a network according to “diffusion centrality,” which nests other standard centrality measures. Testing this prediction with data from 35 ...

We examine a simple economic model of network formation where agents benefit from indirect relationships. We show that small-world features—short path lengths between nodes together with highly clustered link structures—necessarily emerge for a wide set of parameters. (JEL: D85, A14, C72)

The paper attempts to develop a suitable accessibility index for networks where each link has a value such that a smaller number is preferred like distance, cost, or travel time. A measure called distance sum is characterized by three independent properties: anonymity, an appropriately chosen independence axiom, and dominance preservation, which requires that a node not far to any other is at l...

We propose an allocation rule that takes into account the importance of players and their links. Since a network describes the interaction structure between agents, our allocation rule covers both bilateral and multilateral interactions. We provide a characterization of this rule in terms of well known axioms and compare it to other allocation rules in the literature. JEL classifications: A14; ...

We study a stochastic model of influence where agents have yes-no inclinations on some issue, and opinions may change due to mutual influence among the agents. Each agent independently aggregates the opinions of the other agents and possibly herself. We study influence processes modelled by ordered weighted averaging operators. This allows to study situations where the influence process resembl...

This paper studies which social networks maximize trust and welfare when agreements are implicitly enforced. We study a repeated trust game in which trading opportunities arise exogenously and a social network determines the information each player has. We show that cohesive communities, modeled as social networks of complete components, emerge as the optimal community design. Cohesive communit...