AbstractA network payoff function assigns a utility to all participants in a (social) network. In this paper we discuss properties of such network payoff functions that guarantee the existence of certain types of pairwise stable networks and the convergence of certain network formation processes. In particular we investigate network payoff functions that admit an exact network potential or an ordinal network potential. We relate these network potentials to exact and ordinal potentials of a non-cooperative network formation game based on consent in link formation. Our main results extend and strengthen the current insights in the literature on game theoretic approaches to social network formation.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse28_2005.
Date of creation: Oct 2005
Date of revision:
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Network formation; pairwise stability; potential functions;
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-14 (All new papers)
- NEP-GTH-2005-12-14 (Game Theory)
- NEP-ICT-2005-12-14 (Information & Communication Technologies)
- NEP-NET-2005-12-14 (Network Economics)
- NEP-SOC-2005-12-14 (Social Norms & Social Capital)
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