Pairwise-stability and Nash equilibria in network formation
Calvó-Armengol, Antoni (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada)
Ilkılıç, Rahmi (Universiteit Maastricht. Department of Economics)

Date:	2009
Abstract:	Suppose that individual payoffs depend on the network connecting them. Consider the following simultaneous move game of network formation: players announce independently the links they wish to form, and links are formed only under mutual consent. We provide necessary and sufficient conditions on the network link marginal payoffs such that the set of pairwise stable, pairwise-Nash and proper equilibrium networks coincide, where pairwise stable networks are robust to one-link deviations, while pairwise-Nash networks are robust to one-link creation but multilink severance. Under these conditions, proper equilibria in pure strategies are fully characterized by one-link deviation checks.
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original.
Language:	Anglès
Document:	Article ; recerca ; Versió publicada
Subject:	Network formation ; Pairwise-stability ; Proper equilibrium
Published in:	International journal of game theory, Vol. 38 (2009) , p. 51-79, ISSN 0020-7276

DOI: 10.1007/s00182-008-0140-7

29 p, 325.1 KB

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