mixed-strategy equilibria. Our two main results show that, as in many real-life examples, the resulting equilibrium networks …

financial system. We also show that, under natural contracting assumptions, financial networks that emerge in equilibrium may be …

propagation and amplification of microeconomic shocks. The framework nests various classes of games over networks, models of … networks in terms of their aggregate performance. It also sheds light on several seemingly contradictory results in the prior …

financial system. We also show that, under natural contracting assumptions, financial networks that emerge in equilibrium may be …

propagation and amplification of microeconomic shocks. The framework nests various classes of games over networks, models of … networks in terms of their aggregate performance. It also sheds light on several seemingly contradictory results in the prior …

We provide a framework to study the formation of financial networks and investigate the interplay between banks …, creating insufficiently connected financial networks that are excessively prone to contagious defaults. Finally, we show that … banks' private incentives may lead to the formation of financial networks that are overly susceptible to systemic meltdowns …

associated social cliques (consisting of groups of individuals linked to each other at zero cost, such as friendship networks …) ensure the emergence of communication networks that lead to asymptotic learning. Our result shows that societies with too …