Dooan, Gonul
van Assen, M.A.L.M.
van de Rijt, Arnout
Buskens, Vincent
The Stability of Exchange Networks
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This paper develops a formal model of exchange network stability that combines expected value theory (Friedkin 1995) with the economic literature on network dynamics. We identify stable networks up to size 8 for varying costs and investigate whether they are Pareto efficient and egalitarian. Only a very small number of networks are stable. Odd cycles and networks consisting of dyads and at most one isolate are the only egalitarian, efficient, and stable networks for a large cost range. We show that some of these results are generalizable to networks of any size and are independent of using expected value theory.
Exchange Networks;
Stability;
Efficiency;
Equity;
Social Dilemma;
Institutional and Behavioral Economics;
International Development;
2007
http://ageconsearch.umn.edu/record/9098/files/wp070066.pdf;