In this paper we study the effects of institutional constraints on stability, efficiency and network formation. More precisely, an exogenous "societal cover" consisting of a collection of possibly overlapping subsets that covers the whole set of players and such that no set in this collection is...

We study a connections model where the strength of a link depends on the amount invested in it and is determined by an increasing strictly concave function. The revenue from investments in links is the value (information, contacts, friendship) that the nodes receive through the network. First,...