From Exogenous to Endogenous Economic Networks: Internet Applications

40 Pages Posted: 15 Nov 2006

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

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Abstract

Economic agents' behaviour is affected by their position in a network, either exogenous or endogenous, in which they interact with a sub-set 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.

Suggested Citation

D'Ignazio, Alessio and Giovannetti, Emanuele, From Exogenous to Endogenous Economic Networks: Internet Applications. Journal of Economic Surveys, Vol. 20, No. 5, pp. 757-796, December 2006. Available at SSRN: https://ssrn.com/abstract=945252 or http://dx.doi.org/10.1111/j.1467-6419.2006.00267.x

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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