Enforcement with Costly Group Formation

The joint liability literature claims that positive assortative matching, or risk homogeneity, is always the first best solution. We examine this claim in presence of group formation costs and find that the assertion is not always true.Group Formation Costs

Social Network Formation with Consent

We investigate the equilibria of game theoretic models of network formation that are based on individual actions only.Our approach is grounded in three simple and realistic principles: (1) Link formation should be a binary process of consent.(2) Link formation should be costly.(3) The class of network payoff functions should be as general as possible.It is accepted that these consent models have a very large number of equilibria.However, until now no characterization of these equilibria has been established in the literature.We aim to fill this void and provide characterizations of stable networks or the cases of two-sided and one-sided link formation costs.Furthermore, we provide a comparison of Nash equilibria with potential maximizers for a certain specification.game theory;general equilibrium

Key Players and Key Groups in Teams: A Network Approach Using Soccer Data

This paper provides a way of evaluating a player's contribution to her team and relates her effort to her salaries. We collect data from UEFA Euro 2008 Tournament and construct the passing network of each team. Then we determine the key player in the game while ranking all the other players too. Next, we identify key groups of players to determine which combination of players played more important role in the match. Using 2010 market values and observable characteristics of the players, we show that players having higher intercentrality measures regardless of their field position have significantly higher market values.Social networks, team game, centrality measures

Nash Networks with Heterogeneous Agents

A non-cooperative model of network formation is developed. Agents form links with others based on the cost of the link and its assessed benefit. Link formation is one-sided, i.e., agents can initiate links with other agents with- out their consent, provided the agent forming the link makes the appropriate investment. Information flw is two-way. The model builds on the work of Bala and Goyal, but allows for agent heterogeneity. Whereas they permit links to fail with a certain common probability, in our model the probability of failure can be different for different links. We investigate Nash networks that exhibit connectedness and super-connectedness. We provide an explicit characterization of certain star networks. Efficiency and Pareto-optimality issues are discussed through examples. We explore alternative model specifications to address potential shortcomings.

Revisiting Friendship Networks

We extend the model of friendship networks developed by Brueck- ner (2006) in two ways. First, we extend the level of indirect benefits by incorporating benefits from up to three links and explore its impli- cation for the socially optimal and individual e¤ort levels. Next, we generalize the magnetic agent problem by allowing for more than 3 players by restricting ourselves to regular networks that include pay- o¤s from the magnetic agent.

Stable Networks and Convex Payoffs

Recently a variety of link-based stability concepts have emerged in the literature on game theoretic models of social network formation.We investigate two basic formation properties that establish equivalence between some well known types of stable networks and their natural extensions.These properties can be identified as convexity conditions on the network payoff structures.social networks;network formation;pairwise stability