Communication Network Formation with Link Specificity and Value Transferability

MJW Harmsen-van Hout, PJJ Herings, Benedict Dellaert

Research output: Contribution to journalArticleAcademicpeer-review

7 Citations (Scopus)


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.
Original languageEnglish
Pages (from-to)199-211
Number of pages13
JournalEuropean Journal of Operational Research
Issue number1
Publication statusPublished - 26 Mar 2013

Research programs

  • ESE - MKT


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