Efficiency of weighted networks

Abstract

In this paper, we address the question of the efficiency of weighted networks in a setting where nodes derive utility from their direct and indirect connections. Under rather general conditions, based on a set of assumptions about the value that connections in a weighted network generate, and about link-formation technology, we prove that any network is dominated by a special type of nested split graph weighted network. These conditions include some of the models in the literature, which are seen as particular cases of this general model.