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Behavioral foundations and equilibrium notions for social network formation processes

Author

Listed:
  • Nicolas Carayol

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Pascale Roux

    (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville, GRES - Groupe de recherche en économie et statistique - INSEE - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper develops a framework for studying social network formation. Partly built upon a formalism used in theoretical economics, the network formation process we introduce is locally driven by agents who maximize a given individual payoff function. We examine two simple models and observe the limiting distributions of stochastically stable networks. We find that these networks share some of the features observed for social networks. In particular, we find critical values of the parameters for which the selected networks exhibit small world properties.

Suggested Citation

  • Nicolas Carayol & Pascale Roux, 2004. "Behavioral foundations and equilibrium notions for social network formation processes," Post-Print hal-00278689, HAL.
    • Handle: RePEc:hal:journl:hal-00278689
    DOI: 10.1142/S021952590400007X
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    Cited by:

    1. Carayol, Nicolas & Roux, Pascale & YIldIzoGlu, Murat, 2008. "Inefficiencies in a model of spatial networks formation with positive externalities," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 495-511, August.
    2. Nicolas Carayol & Pascale Roux & Murat Yıldızoğlu, 2008. "In search of efficient network structures: the needle in the haystack," Review of Economic Design, Springer;Society for Economic Design, vol. 11(4), pages 339-359, February.
    3. Carayol, Nicolas & Roux, Pascale, 2009. "Knowledge flows and the geography of networks: A strategic model of small world formation," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 414-427, August.

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