We introduce a spatial cost topology in the network formation model analyzed by Jackson and Wolinsky, Journal of Economic Theory (1996), 71: 44-74. This cost topology might represent geographical, social, or individual differences. It describes variable costs of establishing social network...

A network payoff function assigns a utility to all participants in a (social) network. In this paper we discuss properties of such network payoff functions that guarantee the existence of certain types of pairwise stable networks and the convergence of certain network formation processes. In...

Yang's theory of economic specialization under increasing returns to scale (Yang, 2001) is a formal development of the fundamental Smith-Young theorem on the extent of the market and the social division of labor. In this theory, specialization — and thus, the social division of labor — is...

We discuss the emerging field of New Classical economics from the perspective of some classical economic questions regarding the generation of wealth. We limit our discussion to the foundations of the emerging field and do not provide a complete overview of the details of the literature. We...

We investigate the Nash equilibria of game theoretic models of network formation based on explicit consent in link formation. These so-called “consent models” explicitly take account of link formation costs. We provide characterizations of Nash equilibria of such consent models under both...

We examine the process of building social relationships as a non-cooperative game that requires mutual consent and involves reaching out to others at a cost. Players create their social network from amongst their set of acquaintances. Having acquaintances allows players to form naive beliefs...

We show that exhaustion of blocking opportunities is a sufficient condition such that every allocation in the core of a replicated club economy can be decentralized as a competitive equilibrium, and that a weaker condition efficient scale is a necessary condition such that any allocation in the...

The main requirements for equivalence of the core of an economy and the Walrasian equilibrium allocations are largeness and the freedom to form almost arbitrary coalitions in the Edgeworthian barter processes. We investigate whether constraints on coalition formation and coalitional barter alter...