From bilateral two-way to unilateral one-way flow link-formation

Documento de trabajo

Eredu latindarraren eragina euskal deklinabidearen XIX. mendeko deskribapenetan

R. Etxepare, R. Gómez & J. A. Lakarra (arg.), Beñat Oihartzabali Gorazarre - Festschrift for Bernard Oyharçabal. Donostia-San Sebastián: Gipuzkoako Foru Aldundia & UPV/EHU.

Asymmetric flow networks

This paper provides a new model of network formation that bridges the gap between the two benchmark models by Bala and Goyal, the one-way flow model, and the two-way flow model, and includes both as particular extreme cases. As in both benchmark models, in what we call an "asymmetric flow" network a link can be initiated unilaterally by any player with any other, and the flow through a link towards the player who supports it is perfect. Unlike those models, in the opposite direction there is friction or decay. When this decay is complete there is no flow and this corresponds to the one-way flow model. The limit case when the decay in the opposite direction (and asymmetry) disappears, corresponds to the two-way flow model. We characterize stable and strictly stable architectures for the whole range of parameters of this "intermediate" and more general model. We also prove the convergence of Bala and Goyal's dynamic model in this context.

Unilateral vs. Bilateral link-formation: Bridging the gap

We provide a model that bridges the gap between two benchmark models of strategic network formation: Jackson and Wolinsky' s model based on bilateral formation of links, and Bala and Goyal's two-way fl ow model, where links can be unilaterally formed. In the model introduced and studied here a link can be created unilaterally. When it is only supported by one of the two players the fl ow through the link suffers a certain decay, but when it is supported by both the fl ow runs without friction. When the decay in links supported by only one player is maximal (i.e. there is no flow) we have Jackson and Wolinsky 's connections model without decay, while when flow in such links is perfect we have Bala and Goyal' s two-way flow model. We study Nash, strict Nash and pairwise stability for the intermediate models. Efficiency and dynamics are also examined.

A Unifying model of strategic network formation

Documento de trabajo

Europeanization beyond the EU: The case of Georgia.

320 p.