Resource Availability in the Social Cloud: An Economics Perspective

TL;DR

This paper examines how agents' decisions to add or remove links in a social cloud affect local and global resource availability, spillover effects, and the role of closeness, providing insights into network formation and resource sharing dynamics.

Contribution

It offers a novel analysis of resource sharing in social clouds from an economics perspective, highlighting the impact of link decisions and closeness on resource availability and spillover effects.

Findings

Link addition increases local resource availability.

Spillover effects are always present in connected networks.

Closeness influences the nature of spillover effects.

Abstract

This paper focuses on social cloud formation, where agents are involved in a closeness-based conditional resource sharing and build their resource sharing network themselves. The objectives of this paper are: (1) to investigate the impact of agents' decisions of link addition and deletion on their local and global resource availability, (2) to analyze spillover effects in terms of the impact of link addition between a pair of agents on others' utility, (3) to study the role of agents' closeness in determining what type of spillover effects these agents experience in the network, and (4) to model the choices of agents that suggest with whom they want to add links in the social cloud. The findings include the following. Firstly, agents' decision of link addition (deletion) increases (decreases) their local resource availability. However, these observations do not hold in the case of global resource availability. Secondly, in a connected network, agents experience either positive or negative spillover effect and there is no case with no spillover effects. Agents observe no spillover effects if and only if the network is disconnected and consists of more than two components (sub-networks). Furthermore, if there is no change in the closeness of an agent (not involved in link addition) due to a newly added link, then the agent experiences negative spillover effect. Although an increase in the closeness of agents is necessary in order to experience positive spillover effects, the condition is not sufficient. By focusing on parameters such as closeness and shortest distances, we provide conditions under which agents choose to add links so as to maximise their resource availability.