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A model of signed network formation with heterogeneous players

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  • Pandey, Siddhi Gyan

Abstract

This paper proposes a model of formation of signed networks that comprise both positive (friendly/cooperative) and negative (antagonistic) social ties between players who differ intrinsically in strength. Friendships/alliances serve to increase one’s power over their intrinsic strength; in the determination of power it matters not how many allies one has, but who these allies are. The model proposed here is suited to any context where players derive power from friendships/alliances with stronger players and payoffs are extracted from less powerful enemies. The structure of ties across various types of players is studied in Nash equilibria along with a characterization of Nash equilibria under various parametric conditions.

Suggested Citation

  • Pandey, Siddhi Gyan, 2021. "A model of signed network formation with heterogeneous players," Research in Economics, Elsevier, vol. 75(1), pages 119-128.
    • Handle: RePEc:eee:reecon:v:75:y:2021:i:1:p:119-128
    DOI: 10.1016/j.rie.2021.01.003
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    References listed on IDEAS

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    1. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    2. Xiaolong Zheng & Daniel Zeng & Fei-Yue Wang, 2015. "Social balance in signed networks," Information Systems Frontiers, Springer, vol. 17(5), pages 1077-1095, October.
    3. Roger B. Myerson, 1977. "Graphs and Cooperation in Games," Mathematics of Operations Research, INFORMS, vol. 2(3), pages 225-229, August.
    4. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    5. Hiller, Timo, 2017. "Friends and enemies: a model of signed network formation," Theoretical Economics, Econometric Society, vol. 12(3), September.
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    Cited by:

    1. Paolo Bartesaghi & Fernando Diaz-Diaz & Rosanna Grassi & Pierpaolo Uberti, 2024. "Global Balance and Systemic Risk in Financial Correlation Networks," Papers 2407.14272, arXiv.org.

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    More about this item

    Keywords

    Signed network formation; Economics of antagonism; Strength heterogeneity in players; Structural balance;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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