Stochastic Stability in Network with Decay
39 Pages Posted: 31 Mar 2005
Date Written: March 2005
This paper considers a simple communication network characterized by an endogenous architecture and an imperfect transmission of information. We analyze the process of network formation in a dynamic framework where self - interested individuals can form or delete links and, occasionally, are doing mistakes. Then, using stochastic stability, we identify which network structures the formation process will converge to.
Keywords: Network, Decay, Strategical interaction
JEL Classification: A14, D20, J00
Suggested Citation: Suggested Citation