From Exogenous to Endogenous Economic Networks: Internet Applications

University of Cambridge Economics Working Paper No. CWPE 0445

70 Pages Posted: 18 Sep 2004

See all articles by Alessio D'Ignazio

Alessio D'Ignazio

University of Cambridge - Faculty of Economics and Politics

Emanuele Giovannetti

Anglia Ruskin University - Institute for International Management Practice, LAIBS

Multiple version iconThere are 2 versions of this paper

Date Written: July 2004

Abstract

Economic agents' behavior is affected by their position in a network, either exogenous or endogenous, in which they interact with a subset of neighbours only. The network's links, which may be generated by vertical and/or horizontal relations, or by more complex morphologies, may explain the transition between dynamic equilibria and the instability of economic aggregates. Moreover, networks shape strategic interaction among agents by determining their strategies; the problem of access and interconnection, particularly relevant in the Internet, is perhaps the best example. A two-way feedback between strategies and network structures arises instead when links are endogenous: those features are clearly shown in the mechanism underlying the formation of peering links and R & D networks.

Keywords: Vertical restraints, network formation, Internet, peering

JEL Classification: L42, L14, D85, L86

Suggested Citation

D'Ignazio, Alessio and Giovannetti, Emanuele, From Exogenous to Endogenous Economic Networks: Internet Applications (July 2004). University of Cambridge Economics Working Paper No. CWPE 0445. Available at SSRN: https://ssrn.com/abstract=591883 or http://dx.doi.org/10.2139/ssrn.591883

Alessio D'Ignazio

University of Cambridge - Faculty of Economics and Politics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

Emanuele Giovannetti (Contact Author)

Anglia Ruskin University - Institute for International Management Practice, LAIBS ( email )

East Road
Cambridge, Cambridgeshire CB1 1PT
United Kingdom

HOME PAGE: http://anglia.ac.uk/ruskin/en/home/faculties/aibs/staff_profiles/all_staff/emanuele_giovannetti.html

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