Efficient Network in Player and Partner Heterogeneity Models

This paper characterizes efficient networks in player and partner heterogeneity models for both the one-way flow and the two-way flow models. Player (partner) dependent network formation allows benefits and costs to be player (partner) heterogeneous which is an important extension for modeling social networks in the real world. Employing widely used assumptions, I show that efficient networks in the two way flow model are minimally connected and have star or derivative of star type architectures, whereas efficient networks in the one way flow model have wheel architectures.