Coordination in evolving networks with endogenous decay

Francesco Feri, Miguel A. Melendez-Jimenez

Research output: Contribution to journalArticlepeer-review

Abstract

This paper studies an evolutionary model of network formation with endogenous decay, in which agents benefit both from direct and indirect connections. In addition to forming (costly) links, agents choose actions for a coordination game that determines the level of decay of each link. We address the issues of coordination (long-run equilibrium selection) and network formation by means of stochastic stability techniques. We find that the long-run behavior of the system depends on a fine interplay of the link cost and the trade-off between efficiency and risk-dominance.
Original languageEnglish
Pages (from-to)955-1000
Number of pages46
JournalJournal of Evolutionary Economics
Volume23
Issue number5
Early online date21 Apr 2013
DOIs
Publication statusPublished - Nov 2013

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