We study network formation in a strategic setting where every agent strives for short paths to the other agents. The main parameter of our model is the marginal rate of substitution between network benefits and linking costs. We provide boundaries of stable networks for increasing and decreasing...

Since the seminal contribution of Jackson & Wolinsky 1996 [A Strategic Model of Social and Economic Networks, JET 71, 44-74] it has been widely acknowledged that the formation of social networks exhibits a general conflict between individual strategic behavior and collective outcome. What has...

Although both betweenness and closeness centrality are claimed to be important for the effectiveness of someone's network position, it has not been explicitly studied which networks emerge if actors follow incentives for these two positional advantages. We propose such a model and observe that...

The importance of social and economic networks has meanwhile been widely acknowledged throughout social sciences. Network positions are supposed to be important for both, consumers and suppliers. Examples are R&D collaborations, strategic alliances, knowledge management within organizations,...