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Eight degrees of separation

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  • Pin, Paolo

Abstract

We present a network formation game whose equilibria are undirected networks. Every connected couple contributes to the aggregate payoff by a fixed quantity, and the outcome is split between players according to the Myerson value allocation rule. This setup shows a wide multiplicity of non-empty equilibria, all of them connected. We show that the efficient equilibria of the game are either the empty network, or a network whose diameter does not exceed a threshold of 8 (i.e. there are no two nodes with a distance greater than 8).

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Bibliographic Info

Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 65 (2011)
Issue (Month): 3 (September)
Pages: 259-270

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Handle: RePEc:eee:reecon:v:65:y:2011:i:3:p:259-270

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Web page: http://www.elsevier.com/locate/inca/622941

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Keywords: Network formation Myerson value;

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