This paper presents a model of local network effects in which agents connected by a social network each value the adoption of a product by a heterogeneous subset of other agents in their 'neighborhood', and have incomplete information about the structure and strength of adoption...

We introduce a simple two-stage game of endogenous network formation and information sharing for reasoning about the optimal design of social networks like Facebook or Google+. We distinguish between unilateral and bilateral connections and between targeted and collective information sharing....

The Lightning Network is a decentralized payment network built on top of a block-chain, in which intermediary nodes provide a trust-less routing service for end users. We provide an overview of the current state of the network and show that it can be well approximated by a scale free generative...

We analyze R&D collaboration networks in industries where firms are competitors in the product market. Firms' benefits from collaborations arise by sharing knowledge about a cost-reducing technology. By forming collaborations, however, firms also change their own competitive position in the...

We study lobbying in a setting in which decision-makers share resources in a network. Two opposing interest groups choose which decision-maker they want to target with their resource provision, and their decision depends on the decision-makers' ideologies as well as the network structure. We...

This paper analyzes the formation of networks in which each agent is assumed to possess some information of value to the other agents in the network. Agents derive payoff from having access to the information of others through communication or spillovers via the links between them. Linking...

We present a new approach to the study of networks where the formation of links is driven by unilateral initiative of nodes. First, we propose a mathematical description of the extreme introvert and extrovert model (XIE), a dynamic network model in which the number of links fluctuates over time...

This paper studies how systemic risk can appear when rational agents establish derivative contracts in a fixed network. Agents are endowed with risks. They optimize their situation by designing and trading derivative contracts. Those deals spread the risks throughout the network and harmonize...

We study intermediation chains in over-the-counter markets in which agents interact with counter-parties for lending and borrowing liquid assets with collateral under incomplete information. Given a financial network, liquid assets are allocated from initial lenders to final borrowers through a...

This paper proposes an empirical model of network formation, combining strategic and random networks features. Payoffs depend on direct links, but also link externalities. Players meet sequentially at random, myopically updating their links. Under mild assumptions, the network formation process...