（picture source: pixabay）

(Correspondent: Feng Zhuoran) The paper Link Investment Substitutability: A Factor Influencing Network Formation, autored by assistant professor Ding Sihua from our college, was published in the Games and Economic Behavior, 136th issue of 2022. 

Studies on network formation employ rather different assumptions on link formation and make different predictions. The paper proposes a constant elasticity of substitution (CES) link formation specification that generalizes commonly used link formation assumptions and parametrizes a factor that could affect network formation, namely, link investment substitutability (LIS). It applies this approach to the model by Galeotti and Goyal (2010) that studies public good provision on an endogenously formed network and find that results on equilibria differ significantly depending on whether link investments are substitutes or complements. Additionally, when link investments are complements, it finds that LIS governs the unequalness of equilibrium structures. It also explores how LIS influences the relationship between the public good provision of a player and her utility.

Games and Economic Behavior is a widely recognized core journal in the field of theoretical economics, and also an A-level foreign language academic journal recognized by our economic discipline.