TY - JOUR
T1 - Communication Network Formation with Link Specificity and Value Transferability
AU - Harmsen-van Hout, MJW
AU - Herings, PJJ
AU - Dellaert, Benedict
PY - 2013/3/26
Y1 - 2013/3/26
N2 - We model strategic communication network formation with (i) link specificity: link maintenance lowers specific attention and thus value (negative externality previously ignored for communication) and (ii) value transferability via indirect links for informational but not for social value (positive externality modeled uniformly before). Assuming only social value, the pairwise stable set includes many nonstandard networks under high and particular combinations of complete components under low link specificity. Allowing for social and informational value reduces this set to certain fragmented networks under high and the complete network under low link specificity. These extremes are efficient, whereas intermediate link specificity generates inefficiency.
AB - We model strategic communication network formation with (i) link specificity: link maintenance lowers specific attention and thus value (negative externality previously ignored for communication) and (ii) value transferability via indirect links for informational but not for social value (positive externality modeled uniformly before). Assuming only social value, the pairwise stable set includes many nonstandard networks under high and particular combinations of complete components under low link specificity. Allowing for social and informational value reduces this set to certain fragmented networks under high and the complete network under low link specificity. These extremes are efficient, whereas intermediate link specificity generates inefficiency.
U2 - 10.1016/j.ejor.2013.02.028
DO - 10.1016/j.ejor.2013.02.028
M3 - Article
VL - 229
SP - 199
EP - 211
JO - European Journal of Operational Research
JF - European Journal of Operational Research
SN - 0377-2217
IS - 1
ER -