We investigate the Nash equilibria of game theoretic models of network formation based on explicit consent in link formation. These so-called “consent models” explicitly take account of link formation costs. We provide characterizations of Nash equilibria of such consent models under both...

We consider two different approaches to describe the formation of social networks under mutual consent and costly communication. First, we consider a network-based approach; in particular Jackson-Wolinsky's concept of pairwise stability. Next, we discuss a non-cooperative game-theoretic...

We introduce a spatial cost topology in the network formation model analyzed by Jackson and Wolinsky, Journal of Economic Theory (1996), 71: 44-74. This cost topology might represent geographical, social, or individual differences. It describes variable costs of establishing social network...

Yang's theory of economic specialization under increasing returns to scale (Yang, 2001) is a formal development of the fundamental Smith-Young theorem on the extent of the market and the social division of labor. In this theory, specialization — and thus, the social division of labor — is...

We discuss the emerging field of New Classical economics from the perspective of some classical economic questions regarding the generation of wealth. We limit our discussion to the foundations of the emerging field and do not provide a complete overview of the details of the literature. We...