Networks of relations

Steffen Lippert; Giancarlo Spagnolo

We model networks of relational (or implicit) contracts, exploring how sanctioning power and equilibrium conditions change under different network configurations and information transmission technologies. In our model, relations are the links, and the value of the network lies in its ability to enforce cooperative agreements that could not be sustained if agents had no access to other network members' sanctioning power and information. We identify conditions for network stability and in-network information transmission as well as conditions under which stable subnetworks inhibit more valuable larger networks.

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Year of publication:	2004 ; This version: November 03, 2004, First draft: December 2001
Authors:	Lippert, Steffen ; Spagnolo, Giancarlo
Publisher:	München : Sonderforschungsbereich/Transregio 15 Governance and the Efficiency of Economic Systems
Subject:	Networks \| Relational Contracts \| Indirect Multimarket Contact \| Social Capital \| Sozialkapital \| Social capital \| Soziales Netzwerk \| Social network \| Theorie \| Theory \| Unternehmensnetzwerk \| Business network \| Soziale Beziehungen \| Social relations \| Netzwerk \| Network \| Unvollständiger Vertrag \| Incomplete contract