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dc.contributor.authorGOYAL, Sanjeev
dc.contributor.authorVEGA-REDONDO, Fernando
dc.date.accessioned2008-02-01T11:16:25Z
dc.date.available2008-02-01T11:16:25Z
dc.date.issued2007
dc.identifier.citationJournal of Economic Theory, 2007, 137, 1, 460-492en
dc.identifier.urihttps://hdl.handle.net/1814/7934
dc.description.abstractWe consider a setting where every pair of players that undertake a transaction (e.g. exchange goods or information) creates a unit surplus. A transaction can take place only if the players involved have a connection. If the connection is direct the two players split the surplus equally, while if it is indirect then intermediate players also get an equal share of the surplus. Thus, individuals form links with others to create surplus, to gain intermediation rents, and to circumvent others who are trying to become intermediary. Our analysis clarifies the interplay between these forces in the process of strategic network formation. First, we show that, in the absence of capacity constraints on links, it leads to the emergence of a star network where a single agent acts as an intermediary for all transactions and enjoys significantly higher payoffs. Second, we study the implications of capacity constraints in the ability of agents to form links. In this case, distances between players must be long, which induces players who are “far off” to connect in order to avoid paying large intermediation rents. A cycle network then emerges, payoffs being equal across all players.en
dc.language.isoenen
dc.relation.ispartofJournal of Economic Theory
dc.subjectNetworksEN
dc.subjectNetwork formationEN
dc.subjectStructural holesEN
dc.subjectIntermediationEN
dc.subjectC72EN
dc.subjectC78EN
dc.subjectD85EN
dc.titleStructural holes in social networksen
dc.typeArticleen
dc.neeo.contributorGOYAL|Sanjeev|aut|
dc.neeo.contributorVEGA-REDONDO|Fernando|aut|EUI70011
dc.identifier.volume137
dc.identifier.startpage460
dc.identifier.endpage492


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