A Game Theoretical Analysis of Heterogeneous Network Formation

Jackson and Wolinsky (1996) using information value is a typical game theoretical model to explain network formation, however they assume homogeneous actors while real world actors are various. Real world actors choose their friend homophilically, then they form diverse communities. Actors are often familiar to each other in one of these communities inside, but they tend to have no relations mutually on inter-community. This kind of  communities are often called Takotsubo (octopus pots) in Japanese. Moreover ranking and inequality often arise in such a community. However few game theoretical models explain the community formations. Therefore, I propose a new approach to these models.