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Constrained Network Formation

Author

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  • Pietro Battiston

    (Istituto di Economia, Scuola Superiore Sant’Anna)

Abstract

This study presents a novel framework for the study of endogenous network growth subject to constraints. The literature on strategic network formation analysed the specific case of positive constraints: in the present work, the model is extended to constraints which can be negative and change in time depending on the actions of the agents. A characterisation of stable networks in the static case is provided, and it is proved that finding them is computationally difficult unless specific assumptions are made. The framework can be applied to contexts in which the formation of a link inhibits or implies the formation of another one, typically due to time, space or capacity constraints. Two specific examples are investigated, highlighting the importance of modelling constraints in order to obtain credible simulations and null models: the network of corporate control and the network of citations among scientific papers.

Suggested Citation

  • Pietro Battiston, 2016. "Constrained Network Formation," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(3), pages 347-362, November.
    • Handle: RePEc:spr:italej:v:2:y:2016:i:3:d:10.1007_s40797-016-0040-0
    DOI: 10.1007/s40797-016-0040-0
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    References listed on IDEAS

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    1. Barclay, Michael J. & Holderness, Clifford G., 1989. "Private benefits from control of public corporations," Journal of Financial Economics, Elsevier, vol. 25(2), pages 371-395, December.
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    4. Kirchsteiger, Georg & Mantovani, Marco & Mauleon, Ana & Vannetelbosch, Vincent, 2016. "Limited farsightedness in network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 97-120.
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    9. Hans Haller & Jurjen Kamphorst & Sudipta Sarangi, 2007. "(Non-)existence and Scope of Nash Networks," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(3), pages 597-604, June.
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    12. Pietro Battiston, 2014. "Citations are Forever: Modeling Constrained Network Formation," LEM Papers Series 2014/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    13. Dutta, Bhaskar & Mutuswami, Suresh, 1997. "Stable Networks," Journal of Economic Theory, Elsevier, vol. 76(2), pages 322-344, October.
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    Cited by:

    1. Card. Johnson, Rutherford & Walker II, Eddie G., 2021. "Willingness to Pay for Recreational Land Use in Minnesota," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 9(1), January.
    2. Battiston, Pietro & Sacco, Pier Luigi & Stanca, Luca, 2022. "Cover effects on citations uncovered: Evidence from Nature," Journal of Informetrics, Elsevier, vol. 16(2).

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    More about this item

    Keywords

    Network formation; Nash equilibrium; Complexity of equilibria; Network analysis;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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