Strategic Formation of Heterogeneous Networks

We establish a network formation game for the Internet's autonomous system (AS) interconnection topology. The game includes different types of players, accounting for the heterogeneity of ASs in the Internet. In this game, the utility of a player depends on the network structure, e.g., the distances between nodes and the cost of links. Our model is versatile and can accommodate various configurations: whether monetary transfers are allowed, whether survivability requirements are imposed or not, and if so, whether failures are frequent or rare. We analyze static properties of the game as well as its dynamic evolution. We provide a dynamic analysis of topological quantities, and explain the prevalence of some 'network motifs' in the Internet connectivity graph. We assess our predictions with real-world data.