Date of This Version
July 2007
Abstract
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.
Recommended Citation
Doğan , Gönül; van Assen, M.A.L.M. ; van de Rijt, Arnout ; and Buskens, Vincent, "The Stability of Exchange Networks " (July 05, 2007). Fondazione Eni Enrico Mattei Working Papers. Paper 126.
https://services.bepress.com/feem/paper126