In this paper, we model network formation and network interactions under a unified framework. The key feature of our model is to allow individuals to respond to incentives that stem from interaction benefits of certain activities when they choose friends (network links), while capturing...

We model network formation and interactions under a unified framework by considering that individuals anticipate the effect of network structure on the utility of network interactions when choosing links. There are two advantages of this modeling approach: first, we can evaluate whether network...