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Stability and Efficiency of Directed Communication Networks

Dutta, Bhaskar and Jackson, Matthew O. (2003) Stability and Efficiency of Directed Communication Networks. In: Networks and Groups: Models of Strategic Formation. Springer , Berlin, pp. 185-206. ISBN 978-3-642-07719-7.

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This paper analyzes the formation of directed networks where selfinterested individuals choose with whom they communicate. The focus of the paper is on whether the incentives of individuals to add or sever links will lead them to form networks that are efficient from a societal viewpoint. It is shown that for some contexts, to reconcile efficiency with individual incentives, benefits must either be redistributed in ways depending on “outsiders” who do not contribute to the productive value of the network, or in ways that violate equity (i.e., anonymity). It is also shown that there are interesting contexts for which it is possible to ensure that efficient networks are individually stable via (re)distributions that are balanced across components of the network, anonymous, and independent of the connections of non-contributing outsiders.

Item Type:Book Section
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URLURL TypeDescription
Jackson, Matthew O.0000-0001-9846-4249
Additional Information:© 2003 Springer-Verlag Berlin Heidelberg.
Subject Keywords:Networks; Stability; Efficiency; incentives
Classification Code:JEL: A14; D20; J00
Record Number:CaltechAUTHORS:20190918-104003138
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:98718
Deposited By: Tony Diaz
Deposited On:18 Sep 2019 18:27
Last Modified:03 Oct 2019 21:43

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