This paper extends the connections model of network formation by allowing for players who are heterogeneous with respect to values as well as the costs of forming links. Our principal result is that centrality and short average distances between individuals are robust features of equilibrium networks.
This paper provides an axiomatic approach to characterizing the Nash architectures in directed networks. In a directed network (also called one-way flow networks) when player i establishes a link with player j, only player i is able to access player j's information. Player j must establish a separate link with i to gain access to her information. The common… (More)