A Note on Endogenous Link Strength in Directed Communication Networks
13 Pages Posted: 17 Sep 2006
Date Written: september 2006
We present a model of directed communication network with endogenous link strength. Agents are endowed with a fixed amount of resource which they can distribute over links. They obtain indirect benefit by the path maximizing the product of link strength. In this environment, the wheel architecture is shown to be not only the unique efficient architecture but also the unique Nash architecture.
Keywords: Directed Communication Network, Endogenous Link Strength, Network Efficiency, Network Stability
JEL Classification: D85, C70
Suggested Citation: Suggested Citation