TY - JOUR
T1 - Transfers and Resilience in Economic Networks
AU - Montecinos-Pearce, Alejandro
AU - Parro, Francisco
N1 - Publisher Copyright:
© 2023 Walter de Gruyter GmbH, Berlin/Boston.
PY - 2024/1/1
Y1 - 2024/1/1
N2 - We study how decentralized transfers, originated by a selfish motive to preserve direct links, affect the resilience of a network against a shock. Well-off agents transfer resources to other agents in order to prevent the shock from reaching their neighbors. We show that the connectivity of a well-defined portion of the network, specifically, the propagation network, determines the resilience of the entire network. We also show how, although transfers are allocated to a subset of agents, the resilience effect of these transfers is amplified. Lastly, we show that the wealth distribution impacts resilience by determining the incentives of the agents to transfers resources.
AB - We study how decentralized transfers, originated by a selfish motive to preserve direct links, affect the resilience of a network against a shock. Well-off agents transfer resources to other agents in order to prevent the shock from reaching their neighbors. We show that the connectivity of a well-defined portion of the network, specifically, the propagation network, determines the resilience of the entire network. We also show how, although transfers are allocated to a subset of agents, the resilience effect of these transfers is amplified. Lastly, we show that the wealth distribution impacts resilience by determining the incentives of the agents to transfers resources.
UR - http://www.scopus.com/inward/record.url?scp=85163796769&partnerID=8YFLogxK
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U2 - 10.1515/bejte-2021-0152
DO - 10.1515/bejte-2021-0152
M3 - Article
AN - SCOPUS:85163796769
SN - 2194-6124
VL - 24
SP - 77
EP - 126
JO - B.E. Journal of Theoretical Economics
JF - B.E. Journal of Theoretical Economics
IS - 1
ER -