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Local public goods with weighted link formation

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  • Kinateder, Markus
  • Merlino, Luca Paolo

Abstract

We introduce weighted links in a local public good game in an endogenous network with heterogeneous players. We find that the equilibrium predictions are sharper than when links are not weighted. In particular, active players form a complete core-periphery graph, where they are either in the core of interconnected players, or connected to every player in the core. Furthermore, a player's type is tightly related to her public good provision and her position in the network.

Suggested Citation

  • Kinateder, Markus & Merlino, Luca Paolo, 2022. "Local public goods with weighted link formation," Games and Economic Behavior, Elsevier, vol. 132(C), pages 316-327.
    • Handle: RePEc:eee:gamebe:v:132:y:2022:i:c:p:316-327
    DOI: 10.1016/j.geb.2022.01.014
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    Cited by:

    1. Ugo Bolletta & Luca Paolo Merlino, 2022. "Marriage Through Friends," Dynamic Games and Applications, Springer, vol. 12(4), pages 1046-1066, December.
    2. Patrick Allmis & Luca Paolo Merlino, 2023. "Homophily and Specialization in Networks," Papers 2312.00457, arXiv.org.
    3. Olaizola, Norma & Valenciano, Federico, 2024. "Core–periphery and nested networks emerging from a simple model of network formation," Mathematical Social Sciences, Elsevier, vol. 129(C), pages 42-51.
    4. Kinateder, Markus & Merlino, Luca Paolo, 2023. "Free riding in networks," European Economic Review, Elsevier, vol. 152(C).
    5. Ding, Sihua, 2022. "Link investment substitutability: A factor influencing network formation," Games and Economic Behavior, Elsevier, vol. 136(C), pages 340-359.
    6. Ryan Kor & Junjie Zhou, 2022. "Welfare and Distributional Effects of Joint Intervention in Networks," Papers 2206.03863, arXiv.org.

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    More about this item

    Keywords

    Weighted networks; Network formation; Public goods; Free riding;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D00 - Microeconomics - - General - - - General
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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