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    Ambiguous networks

    Pelliccia, Marco (2013) Ambiguous networks. Working Paper. Birkbeck College, University of London, London, UK.

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    Abstract

    We investigate the impact of network structures describing reciprocal influence-relationships between agents on their perceived ambiguity. We argue that, under specific assumptions, the potential complexity of the link-structures creates extra uncertainty or ambiguity over the "right" probability distribution to consider. This result affects the optimal equilibrium structures which arise in a dynamic game where the agents/nodes strategically rewire their links to minimize the perceived uncertainty. The model could explain specific network dynamics observed in markets with asymmetric or not perfect information on the partners' outcomes. For instance, we propose an interpretation of the dynamic of the European Interbank Market structure before and after the recent financial crisis.

    Metadata

    Item Type: Monograph (Working Paper)
    Keyword(s) / Subject(s): Ambiguity, Network, Interbank Market
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Administrator
    Date Deposited: 30 Apr 2013 11:02
    Last Modified: 11 Oct 2016 12:00
    URI: http://eprints.bbk.ac.uk/id/eprint/6530

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