A strategic analysis of network reliability

Venkatesh Bala, Sanjeev Goyal

Research output: Contribution to journalArticlepeer-review


We consider a non-cooperative model of information networks where communication is costly and not fully reliable. We examine the nature of Nash networks and efficient networks. We find that if the society is large, and link formation costs are moderate, Nash networks as well as efficient networks will be 'super-connected', i.e. every link is redundant in the sense that the network remains connected even after the link is deleted. This contrasts with the properties of a deterministic model of information decay, where Nash networks typically involve unique paths between agents. We also find that if costs are very low or very high, or if links are highly reliable then there is virtually no conflict between efficiency and stability. However, for intermediate values of costs and link reliability, Nash networks may be underconnected relative to the social optimum.

Original languageEnglish (US)
Pages (from-to)205-228
Number of pages24
JournalReview of Economic Design
Issue number3
StatePublished - 2000


  • Communication
  • Coordination games
  • Networks

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance


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