One-way Flow Networks: the Role of Heterogeneity
2004-03-15
Research Paper
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I study a one-way flow connections model in which players are heterogeneous with respect to values and the costs of establishing a link. I first show that values and costs asymmetries are crucial in determining the level of connectedness of a network. Interestingly, unconnected equilibria are asymmetric and central players may emerge. Second, I show that non-singleton components have a wheel architecture as far as the costs of linking are not partner specific. Otherwise also the flower architecture constitutes an equilibrium. I interpret these results as saying that asymmetric connections across players are a peculiar feature of homogeneous environments; by contrast, in heterogeneous settings players hold asymmetric connections, which are accompanied by the emergence of central players.
- player
- network
- equilibrium
- component
- player i
- wheel
- architecture
- non-singleton component
- lemma
- proof
- non-singleton
- flower
- wheel architecture
- access
- center
- proposition
- equilibria
- value
- network g
- model
