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Local Interaction, Altruism and the Evolution of Networks

Author

Listed:
  • Tackseung Jun

    (Kyung Hee University)

  • Jeong-Yoo Kim

    (Kyung Hee University)

Abstract

We consider evolving networks on which players interact locally. In an evolutionary environment, players can increase their fitness either by changing their behavior or by changing their neighbors. We propose a static solution concept, what we call Stable Network Configuration (SNC). Roughly speaking, it requires that no player in the population distribution will change his type by imitating his best-performing neighbor, nor change his neighbor by rewiring his links. We characterize the necessary and sufficient conditions for the symmetric SNC in a network formation situation associated with the Prisoner's Dilemma game. Unlike the result by Eshel et al. (1998) that was obtained in a fixed circular network, all altruists and all egoists fare equally well and all altruists have links with some or all egoists in the symmetric SNC.

Suggested Citation

  • Tackseung Jun & Jeong-Yoo Kim, 2009. "Local Interaction, Altruism and the Evolution of Networks," Korean Economic Review, Korean Economic Association, vol. 25, pages 269-287.
    • Handle: RePEc:kea:keappr:ker-20091231-25-2-04
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    References listed on IDEAS

    as
    1. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
    2. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-155, May.
    3. Nobuyuki Hanaki & Alexander Peterhansl & Peter S. Dodds & Duncan J. Watts, 2007. "Cooperation in Evolving Social Networks," Management Science, INFORMS, vol. 53(7), pages 1036-1050, July.
    4. Ilan Eshel & Larry Samuelson & Avner Shaked, "undated". "Altruists Egoists and Hooligans in a Local Interaction Model," ELSE working papers 005, ESRC Centre on Economics Learning and Social Evolution.
    5. Eshel, Ilan & Samuelson, Larry & Shaked, Avner, 1998. "Altruists, Egoists, and Hooligans in a Local Interaction Model," American Economic Review, American Economic Association, vol. 88(1), pages 157-179, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Altruistic Behavior; Best-Accommodating Strategy; Local Interaction; Network Formation; Stable Network Configuration;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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