We present a network model of the interbank market in which optimizing risk averse banks lend to each other and invest … interlinkages and fire sale externalities. The resulting network configuration exhibits a core-periphery structure, dis …

networks form, the impact of network structure on agents' outcomes, and the evolution of networks over time. For this purpose …, we combine a network game introduced by Ballester et al. (2006), where the Nash equilibrium action of each agent is … proportional to her Bonacich centrality, with an endogenous network formation process. Links are formed on the basis of agents …

We consider a dynamic model of network formation where agents form and sever links based on the centrality of their …

We develop a dynamic network formation model that can explain the observed nestedness in real-world networks. Links are … identify the networks to which the network formation process converges and find that they are nested split graphs. We … by real-world networks. Using four different network datasets, we empirically test our model and show that it fits well …

quality of individual banks is opaque but can be inferred by creditors from aggregate signals about bank solvency. When bank …. This information contagion is more likely under clustered asset structures. In contrast, when bank debt is long …

demographic and social network data in 43 villages in South India before microfinance was introduced in those villages and then … tracked eventual participation. We exploit exogenous variation in the importance (in a network sense) of the people who were …

We study from both a theoretical and an empirical perspective how a network of military alliances and enmities affects … the intensity of a conflict. The model combines elements from network theory and from the politico-economic theory of … characterization of the Nash equilibrium of the fighting game, and of how the network structure affects individual and total fighting …

investors to be less prone to run individual banks, but runs will be systemic. In addition, we show that bank runs are …

pre-crisis bank behavior, and suggest implications for the optimal design of capital regulation. …

liability of banks and the presence of a negative externality of one bank’s failure on the health of other banks give rise to a … risk. Regulatory mechanisms such as bank closure policy and capital adequacy requirements that are commonly based only on a … bank’s own risk fail to mitigate aggregate risk-shifting incentives, and can, in fact, accentuate systemic risk. Prudential …