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Two models of network formation with the players partitioned into groups are introduced. In the first model, we examine the influence of four utility functions on the set of stable networks. The costs involved into a player’s utility are affected by the given partition in different ways. Comparisons of conditions for specific network structures to be stable under various utility functions are presented. In the second model, we characterize the stable networks generated by a process of players’ interactions with incomplete information. Players meet randomly and sequentially, myopically updating their links in dynamics. Comparison of the cases under complete and incomplete information is provided.

(Joint work with Elena Parilina)