Migration networks as a response to financial constraints: Onset and endogenous dynamics

A migration network is modeled as a mutually beneficial cooperative agreement between financially-constrained individuals who seek to finance and expedite their migration. The cooperation agreement creates a network: established migrants contract to support the subsequent migration of others in exchange for receiving support themselves. When the model is expanded to study cooperation between more than two migrants, it emerges that there is a finite optimal size of the migration network. Consequently, would-be migrants in the sending country will form a multitude of networks, rather than a single grand network. When the risk involved in participating in a cooperation agreement is incorporated, the propensity to enter an agreement is shown to depend positively on the cost of migration.