On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small Decay
The tension between stability and efficiency in network formation models refers to a common finding in the literature of social networks: equilibrium networks and efficient networks often exhibit substantially different characteristics. In this note, I show that this tension can be partially reconci...
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| Format: | Article |
| Language: | English |
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Dunarea de Jos University of Galati
2025-04-01
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| Series: | Annals of Dunarea de Jos University. Fascicle I : Economics and Applied Informatics |
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| Online Access: | http://eia.feaa.ugal.ro/images/eia/2025_1/Banchongsan_Charoensook.pdf |
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| _version_ | 1850196189090152448 |
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| author | Banchongsan Charoensook |
| author_facet | Banchongsan Charoensook |
| author_sort | Banchongsan Charoensook |
| collection | DOAJ |
| description | The tension between stability and efficiency in network formation models refers to a common finding in the literature of social networks: equilibrium networks and efficient networks often exhibit substantially different characteristics. In this note, I show that this tension can be partially reconciled in the two-way flow model of network formation with partner heterogeneity by introducing a small degree of information decay. This result extends a similar finding established for homogeneous agents in Charoensook (2025). Thus, this note contributes to the literature by demonstrating that the reconciliation of stability and efficiency through a small decay assumption is not confined to models with agent homogeneity but also holds in more general network settings. |
| format | Article |
| id | doaj-art-84c5532d784a41aab12fcce0d336a247 |
| institution | OA Journals |
| issn | 1584-0409 |
| language | English |
| publishDate | 2025-04-01 |
| publisher | Dunarea de Jos University of Galati |
| record_format | Article |
| series | Annals of Dunarea de Jos University. Fascicle I : Economics and Applied Informatics |
| spelling | doaj-art-84c5532d784a41aab12fcce0d336a2472025-08-20T02:13:31ZengDunarea de Jos University of GalatiAnnals of Dunarea de Jos University. Fascicle I : Economics and Applied Informatics1584-04092025-04-0131116216910.35219/eai15840409496On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small DecayBanchongsan Charoensook0Keimyung University, Daegu, South KoreaThe tension between stability and efficiency in network formation models refers to a common finding in the literature of social networks: equilibrium networks and efficient networks often exhibit substantially different characteristics. In this note, I show that this tension can be partially reconciled in the two-way flow model of network formation with partner heterogeneity by introducing a small degree of information decay. This result extends a similar finding established for homogeneous agents in Charoensook (2025). Thus, this note contributes to the literature by demonstrating that the reconciliation of stability and efficiency through a small decay assumption is not confined to models with agent homogeneity but also holds in more general network settings.http://eia.feaa.ugal.ro/images/eia/2025_1/Banchongsan_Charoensook.pdfnetwork formationnash networktwo-way flow networkagent heterogeneityefficient network |
| spellingShingle | Banchongsan Charoensook On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small Decay Annals of Dunarea de Jos University. Fascicle I : Economics and Applied Informatics network formation nash network two-way flow network agent heterogeneity efficient network |
| title | On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small Decay |
| title_full | On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small Decay |
| title_fullStr | On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small Decay |
| title_full_unstemmed | On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small Decay |
| title_short | On the Tension Between Stability and Efficiency in Two-Way Flow Network with Small Decay |
| title_sort | on the tension between stability and efficiency in two way flow network with small decay |
| topic | network formation nash network two-way flow network agent heterogeneity efficient network |
| url | http://eia.feaa.ugal.ro/images/eia/2025_1/Banchongsan_Charoensook.pdf |
| work_keys_str_mv | AT banchongsancharoensook onthetensionbetweenstabilityandefficiencyintwowayflownetworkwithsmalldecay |