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Stable Nash networks with production

This dissertation studies how and in what forms the relationships between the agents in a society shape. We provide four models to examine the outcomes of the non-cooperative network formation game where agents engage in two activities: forming links and producing output. We show that when a link between two agents allows only the forming agent to enjoy the output of the other, a society always admits a stable network. Furthermore, this network almost always has a center-periphery structure. Such societies consist of two types of agents, centers that are directly connected by every other agent and peripheries to whom no agent connects. We also find that centers produce more output and typically have lower payoff than peripheries. When a link allows both agents to enjoy the output of each other, a society does not always admit a stable network. In societies where agents enjoy the outputs of those that are also indirectly linked, stable networks can take much richer forms. In this setup stable networks include the center-periphery networks as well as the wheel and star networks. If agents can adjust the efficiency of their links, then every society admits a stable network which always has a center-periphery structure. / Our results for all four models show that the level of production in non-empty stable networks is less than the amount that will maximize the total benefits in the society.
Date January 2003
CreatorsPostalci, Mustafa Efe
ContributorsGreenberg, Joseph (advisor), Bala, Venkatesh (advisor)
PublisherMcGill University
Source SetsLibrary and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada
Detected LanguageEnglish
TypeElectronic Thesis or Dissertation
CoverageDoctor of Philosophy (Department of Economics.)
RightsAll items in eScholarship@McGill are protected by copyright with all rights reserved unless otherwise indicated.
Relationalephsysno: 002101853, proquestno: AAINQ98350, Theses scanned by UMI/ProQuest.

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