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On the Interaction between Small Decay, Agent Heterogeneity and Diameter of Minimal Strict Nash Networks in Two-way Flow Model

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  • Banchongsan Charoensook

    (Department of International Business, Keimyung Adams College, Keimyung University)

Abstract

This paper studies the roles of value heterogeneity, that is, agents are heterogeneous in terms of information values that they possess, in determining the shapes of two-way flow Strict Nash networks when a small amount of decay is present. I do so by extending the two-way flow network with small decay of De Jaegher and Kamphorst (J ECON BEHAV ORGAN, 2015). Results of this extension show that the effects of value heterogeneity resemble the effects of cost heterogeneity found in the literature. Another surprising finding is that value heterogeneity can extend diameters of Strict Nash networks without changing other properties.

Suggested Citation

  • Banchongsan Charoensook, 2020. "On the Interaction between Small Decay, Agent Heterogeneity and Diameter of Minimal Strict Nash Networks in Two-way Flow Model," Annals of Economics and Finance, Society for AEF, vol. 21(2), pages 331-361, November.
    • Handle: RePEc:cuf:journl:y:2020:v:21:i:2:charoensook
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    References listed on IDEAS

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    1. Charoensook, Banchongsan, 2015. "On the Interaction between Player Heterogeneity and Partner Heterogeneity in Two-way Flow Strict Nash Networks," Climate Change and Sustainable Development 204844, Fondazione Eni Enrico Mattei (FEEM).
    2. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
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    4. De Jaegher, K. & Kamphorst, J.J.A., 2015. "Minimal two-way flow networks with small decay," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 217-239.
    5. Billand, Pascal & Bravard, Christophe & Sarangi, Sudipta, 2012. "Existence of Nash networks and partner heterogeneity," Mathematical Social Sciences, Elsevier, vol. 64(2), pages 152-158.
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    7. Charoensook, Banchongsan, 2015. "On the Interaction between Player Heterogeneity and Partner Heterogeneity in Strict Nash Networks," MPRA Paper 61205, University Library of Munich, Germany.
    8. Emre Unlu, 2018. "Efficient Networks in Models with Player and Partner Heterogeneity," Manchester School, University of Manchester, vol. 86(1), pages 100-118, January.
    9. Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2011. "Strict Nash networks and partner heterogeneity," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(3), pages 515-525, August.
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    More about this item

    Keywords

    Network formation; Strict Nash network; Two-way flow network; Agent heterogeneity;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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