Average Distance, Diameter, and Clustering in Social Networks with Homophily

I examine a random network model where nodes are categorized by type and linking probabilities can differ across types. I show that as homophily increases (so that the probability to link to other nodes of the same type increases and the probability of linking to nodes of some other types decreases) the average distance and diameter of the network are unchanged, while the average clustering in the network increases

Efficiency and Information Aggregation in Auctions with Costly Information

Consider an auction in which $k$ identical objects are sold to $n>k$ bidders who each have a value for one object which can have both private and common components to it. Private information concerning the common component of the object is not exogenously given, but rather endogenous and bidders face a cost to becoming informed. If the cost of information is not prohibitively high, then the equilibrium price in a uniform price auction will not aggregate private information, in contrast to the costless information case. Moreover, for a wide class of auctions if the cost of information is not prohibitively high then the objects can only be allocated in a weakly efficient sense, and then only if the equilibrium proportion of endogenously informed agents is vanishing as the economy grows. In spite of these results, it is shown that there is a mechanism for which there exist equilibria and for which (weak) efficiency is achieved as the economy grows in the face of endogenous information acquisition.Auctions, Efficiency, Information Acquisition, Information Aggregation

Allocation Rules for Network Games

Previous allocation rules for network games, such as the Myerson Value, implicitly or explicitly take the network structure as fixed. In many situations, however, the network structure can be altered by players. This means that the value of alternative network structures (not just sub-networks) can and should influence the allocation of value among players on any given network structure. I present a family of allocation rules that incorporate information about alternative network structures when allocating value.Networks, Network Games, Allocation Rules, Cooperative Games

Allocation Rules for Network Games

Previous allocation rules for network games, such as the Myerson Value, implicitly or explicitly take the network structure as fixed. In many situations, however, the network structure can be altered by players. This means that the value of alternative network structures (not just sub-networks) can and should influence the allocation of value among players on any given network structure. I present a family of allocation rules that incorporate information about alternative network structures when allocating value.networks, network games, allocation rules

Diffusion in Networks and the Unexpected Virtue of Burstiness

Whether an idea, information, infection, or innovation diffuses throughout a society depends not only on the structure of the network of interactions, but also on the timing of those interactions. Recent studies have shown that diffusion can fail on a network in which people are only active in "bursts", active for a while and then silent for a while, but diffusion could succeed on the same network if people were active in a more random Poisson manner. Those studies generally consider models in which nodes are active according to the same random timing process and then ask which timing is optimal. In reality, people differ widely in their activity patterns -- some are bursty and others are not. Here we show that, if people differ in their activity patterns, bursty behavior does not always hurt the diffusion, and in fact having some (but not all) of the population be bursty significantly helps diffusion. We prove that maximizing diffusion requires heterogeneous activity patterns across agents, and the overall maximizing pattern of agents' activity times does not involve any Poisson behavior

On the Weights of Nations: Assigning Voting Weights in a Heterogeneous Union

We study indirect democracy in which countries, states, or districts each elect a representative who later votes at a union level on their behalf. We show that the voting rule that maximizes the total expected utility of all agents in the union involves assigning a weight to each district's vote and then sticking with the status quo unless at least a threshold of weighted votes is cast for change. We analyze how the weights relate to the population size of a country and the correlation structure of agents' preferences, and then we compare the voting weights in the Council of the European Union under the Nice Treaty and the recently proposed Constitution

A Survey of Models of Network Formation: Stability and Efficiency

I survey the recent literature on the formation of networks. I provide definitions of network games, a number of examples of models from the literature, and discuss some of what is known about the (in)compatibility of overall societal welfare with individual incentives to form and sever links

On the Weights of Nations: Assigning Voting Weights in a Heterogeneous Union

Consider a voting procedure where countries, states, or districts comprising a union each elect representatives who then participate in later votes at the union level on their behalf. The countries, provinces, and states may vary in their populations and composition. If we wish to maximize the total expected utility of all agents in the union, how to weight the votes of the representatives of the different countries, states or districts at the union level? We provide a simple characterization of the efficient voting rule in terms of the weights assigned to different districts and the voting threshold (how large a qualified majority is needed to induce change versus the status quo). Next, in the context of a model of the correlation structure of agents preferences, we analyze how voting weights relate to the population size of a country. We then analyze the voting weights in Council of the European Union under the Nice Treaty and the recently proposed constitution, and contrast them under different versions of our model, and compare them to the weights derived from poll data.Majority rule, Voting, Weighted voting, European Union