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The enemy of my enemy is my friend: new conditions for network games

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  • Hideto Koizumi

    (Hideto Koizumi RIETI Hitotsubashi University
    Hitotsubashi University)

Abstract

Group formation tends to involve peer effects. In the presence of such complementarities, however, coalitional games need not have a nonempty core. With a restricted preference structure, I provide new sufficient conditions for the nonemptiness of the core of network games that involve pairwise complementarities between peers. The conditions are twofold: (a) sign-consistency—all agents agree on the sign of the value of any link—and (b) sign-balance—the enemy of my enemy is my friend. My conditions provide a game-theoretic explanation for the longevity of the dichotomy of political alliances in the contemporary world.

Suggested Citation

  • Hideto Koizumi, 2023. "The enemy of my enemy is my friend: new conditions for network games," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(2), pages 223-233, October.
    • Handle: RePEc:spr:etbull:v:11:y:2023:i:2:d:10.1007_s40505-023-00253-7
    DOI: 10.1007/s40505-023-00253-7
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    References listed on IDEAS

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    1. Navarro, Noemí, 2010. "Flexible network rules for identified externalities," Games and Economic Behavior, Elsevier, vol. 69(2), pages 401-410, July.
    2. Jackson, Matthew O., 2005. "Allocation rules for network games," Games and Economic Behavior, Elsevier, vol. 51(1), pages 128-154, April.
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    5. Lawrence M. Ausubel & Peter Cramton & R. Preston McAfee & John McMillan, 1997. "Synergies in Wireless Telephony: Evidence from the Broadband PCS Auctions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(3), pages 497-527, September.
    6. Xiaotie Deng & Toshihide Ibaraki & Hiroshi Nagamochi, 1999. "Algorithmic Aspects of the Core of Combinatorial Optimization Games," Mathematics of Operations Research, INFORMS, vol. 24(3), pages 751-766, August.
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    8. Navarro, Noemi, 2007. "Fair allocation in networks with externalities," Games and Economic Behavior, Elsevier, vol. 58(2), pages 354-364, February.
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    Cited by:

    1. Hideto Koizumi, 2023. "Escalation of a local conflict into a Cold War," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-6, December.

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    More about this item

    Keywords

    Network games; Coalition formation; Cooperative games; Core;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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