Power and Core-Periphery Networks

Persitz, Dotan

doi:10.2139/ssrn.1579634

Cited by 6 publications

(2 citation statements)

References 57 publications

(32 reference statements)

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“…Galeotti and Goyal (2010) and Hiller (2015) provide conditions under which core-periphery networks are the only stable network structure. See also Persitz (2012) who adopts heterogeneity in the connections model of Jackson and Wolinsky (1996). This literature cannot easily be translated to financial networks, because of the different interpretation of links as (channels for) financial transactions.…”

Section: Introductionmentioning

confidence: 99%

The Formation of a Core-Periphery Structure in Heterogeneous Financial Networks

2016

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Recent empirical evidence suggests that financial networks exhibit a core-periphery network structure. This paper aims at giving an explanation for the emergence of such a structure using network formation theory. We propose a simple model of the overnight interbank lending market, in which banks compete for intermediation benefits. Focusing on the role of bank heterogeneity, we find that a core-periphery network cannot be unilaterally stable when banks are homogeneous. A core-periphery network structure can form endogenously, however, if we allow for heterogeneity among banks in size. Moreover, size heterogeneity may arise endogenously if payoffs feed back into bank size.

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Section: Introductionmentioning

confidence: 99%

The Formation of a Core-Periphery Structure in Heterogeneous Financial Networks

2016

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“…High innovative and low innovative potential firms have been introduced in a context of R&D networks by Persitz (). However, the author's model does not consider the second stage of our game: the oligopoly game.…”

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confidence: 99%

FIRM HETEROGENEITY AND THE PATTERN OF R&D COLLABORATIONS

et al. 2019

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We consider an oligopoly setting in which firms form pairwise collaborative links in research and development with other firms. Each collaboration generates a value that depends on the identity of the firms that collaborate. First, we provide properties satisfied by pairwise equilibrium networks and efficient networks. Second, we use these properties in two types of situation: (1) there are two groups of firms, and the value of a collaboration is higher when firms belong to the same group; (2) some firms have more innovative capabilities than others. These two situations provide clear insights about how firms' heterogeneity affects both equilibrium and efficient networks. We also show that the most valuable collaborative links do not always appear in equilibrium, and a public policy that increases the value of the most valuable links may lead to a loss of social welfare. (JEL C70, L13, L20)

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The Menagerie of Social Agents: People and Their Connections

Battle-Fisher

2014

SpringerBriefs in Public Health

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Power and Core-Periphery Networks

Cited by 6 publications

References 57 publications

The Formation of a Core-Periphery Structure in Heterogeneous Financial Networks

The Formation of a Core-Periphery Structure in Heterogeneous Financial Networks

FIRM HETEROGENEITY AND THE PATTERN OF R&D COLLABORATIONS

The Menagerie of Social Agents: People and Their Connections

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