Networks emerging in a volatile world

speaker: Fernando Vega-Redondo (Department of Economics European University Institute)

abstract: The paper proposes a stochastic dynamic model where agent behavior and the underlying social network coevolve in a setup with high link volatility, i.e. with connections subject to fast "obsolescence" and decay. Under these conditions, our objective is to understand whether, and how, a widely networked society may ever arise and then remain in place. A key feature of the model is that only agents displaying the same behavior form new links, while their common behavior remains in place as long as their link is maintained. This leads to a tight interplay between link creation and behavioral change in the dynamics of the system. The main contribution of the paper is three-fold. First, we find that, depending on the level of volatility, the model produces a wide range of possible behavior: sharp and gradual transitions, dense and sparse networks, or unique and multiple outcomes. Second, we show that this rich performance unfolds in a very different manner within different time horizons (e.g. concerning its reversibility or dependence on initial conditions). Third, we develop mathematical tools that integrate the analysis of these different horizons and also afford a full characterization of the predictions induced in each case.

timetable:
Thu 29 Apr, 15:00 - 17:00,
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