NETWORKS · Networks, Markets and Organizations

The complex set of relationships among economic agents has profound effects on individuals’ behaviour and economic outcomes. This premise, which finds strong empirical support, is at the basis of the recent development of the economic theory of networks. Research on networks in the last 15 years has set up a common tool to model and study complex relationships within the economic paradigm. This project will advance the state of the art by 1) furthering the development of network theory in economics, and 2) developing new applied models of networks in economics.The project is organised into three, inter-related sub-projects. In sub-project 1, networks will be used to represent different markets architectures. The objectives are to explain how trading mechanisms and the architecture of the network jointly shape the properties of the market equilibrium, and to provide normative insights on how to organize and regulate markets where trading networks are in place. In sub-project 2, networks will be used to model organizations. The objectives are to improve our understanding of the optimal design of an organization, and to provide a rationale for the current empirical organizational trends from hierarchical to more decentralised organizations. In sub-project 3, networks will be used to model communication. The objectives are to improve our understanding of information aggregation in multi-player environments, and to apply these insights to understand the effect of strategic communication on political games.