SEMINAIRE DE RECHERCHE EN ECONOMIE - GATE Lyon Saint-Etienne : Sudipta SARANGI

Sudipta Sarangi, Virginia Tech présentera un séminaire intitulé : Network Formation with Multigraphs and Strategic Complementarities: The Silver Spoon Effect.

Thème de recherche / Main topics : Network formation, multigraphs, strategic complementarities, Katz-Bonacich centrality, nested split graphs.

Résumé / abstract  : The literature on the endogenous formation of networks/graphs, has explained the architecture of equilibrium networks in terms of the benefits and costs of links engendered within the network. However, individuals are typically connected to others in multiple network relationships, and the architecture of one network could be shaped in an important way by connections in other networks. This paper examines the formation of one network when connections in a second network are inherited. The only linkage between the two networks is that the respective actions in each are (weak) strategic complements. We show that this relatively weak linkage between networks is enough to generate a silver spoon effect: those who inherit the highest number of connections also form the highest number of connections, and those who inherit the least form the least. In particular, we show that when the …fixed network is an asymmetric nested split graph, then the architecture of the endogenously formed graph for intermediate level of linking costs is also a nested split graph. On the other hand, when the …fixed network is regular, then the endogenously formed network is either empty or complete. Our analysis explains why inequality is often entrenched in society, how asymmetries in one network may be magni…fied or diminished in another, and what determines the identity of players occupying the various vertices of asymmetric equilibrium networks.

Co-authors : Sumit Joshi & Ahmed Saber Mahmud

Sudipta Sarangi

Network Formation with Multigraphs and Strategic Complementarities: The Silver Spoon Effect