On the emergence of scale-free production networks

Stanislao Gualdi (1, 2) , Antoine Mandel (3, 4)

1 CentraleSupélec
2 MICS - Mathématiques et Informatique pour la Complexité et les Systèmes
3 CES - Centre d'économie de la Sorbonne
4 PSE - Paris School of Economics

We propose a simple dynamical model for the formation of production networks among monopolistically competitive firms. The model subsumes the standard general equilibrium approach à la Arrow–Debreu but displays a wide set of potential dynamic behaviors. It robustly reproduces key stylized facts of firms׳ demographics. Our main result is that competition between intermediate good producers generically leads to the emergence of scale-free production networks.

Mots clés: General equilibrium; Production network; Monopolistic competition; Distribution of firms׳ size; Firms demographics; Scale-free networks

Domaines: Economies et finances

Stanislao Gualdi, Antoine Mandel. On the emergence of scale-free production networks. Journal of Economic Dynamics and Control, 2016, 73, pp.61-77. ⟨10.1016/j.jedc.2016.09.012⟩. ⟨halshs-01387547⟩