This chapter shows that networks can have large and differentiated effects on behavior and then argues that social and … economic pressures facilitate the formation of heterogeneous networks. Thus networks can play an important role in …

future choices. These considerations motivate a rich research programme on how social networks shape individual and …

stable networks.Our analysis reveals that in a setting where firms are ex-ante identical, strategically stablenetworks are … characterize such asymmetric networks; the dominant grouparchitecture, stars, and inter-linked stars are found to be stable. In … asymmetric networks, thefirms with many links have lower costs of production as compared to firms with few links …