Multiplex Formation

Economic agents are typically connected in multiple interrelated networks (multiplex). We examine how an initial “seed” network prompts link formation on the multiplex and shapes its equilibrium topology. In a duplex, positive (negative) externalities emanating from strategic complementarity (substitutability) in actions between network pairs produce parallel (flipped) architectures in which high-centrality agents in one network occupy high (low) centrality positions in the other. Extending to the full multiplex, if the first coupling between networks is one of complements, then all non-empty networks display parallel architectures to the seed; with substitutes, both parallel and flipped architectures emerge in the class of “balanced” multiplexes.