Heterogeneity in Nash Networks*
نویسندگان
چکیده
Heterogeneity in Nash networks with two-way flow can arise due to differences in the following four variables: (i) the value of information held by agents, (ii) the rate at which information decays or loses its value as it traverses the network, (iii) the probability with which a link transmits information, and (iv) the cost of forming a link. In this paper we show that heterogeneity plays an important role in determining the architectures of Nash and efficient networks: with heterogeneity all networks can be Nash or efficient. This sharply contrasts with the homogeneous cases. We also find that heterogeneity is crucial for non existence of Nash networks. Finally, we show that there is in general no relationship between the decay and probabilistic models of heterogeneity. JEL Classification: C72, D85
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