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Farsightedly stable networks

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Author Info
Jean-Jacques, HERINGS
Ana, MAULEON
Vincent, VANNETELBOSCH (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

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Abstract

We propose a new concept, the pairwise farsightedly stable set, in order to predict which networks may be formed among farsighted players. A set of networks G is pairwise farsightedly stable (i) if all possible pairwise deviations from any network g E G to a network outside G are deterred by the threat of endind worse off or equally well off, (ii) if there exists a farsightedly improving path from any network outside the set leading to some network in the set, and (iii) if there is no proper subset of G satisfying (i) and (ii). We show that a non-empty pairwise farsightedly stable set always exists and we provide a full characterization of unique pairwise farsightedly stable sets of networks. Contrary to other pairwise concepts, pairwise farsightedly yields a Pareto dominating betwork, if it exists, as the unique outcome. Finally, we study the relationship between pairwise farsightedly stability and other concepts such as the largest consistent set.

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Publisher Info
Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2006046.

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Length: 29
Date of creation: 15 Oct 2006
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Handle: RePEc:ctl:louvec:2006046

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Related research
Keywords: Networks; Farsighted; Stability; Pairwise; Efficiency;

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Find related papers by JEL classification:
A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
D20 - Microeconomics - - Production and Organizations - - - General

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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  2. Herings, P. Jean-Jacques & Mauleon, Ana & Vannetelbosch, Vincent J., 2004. "Rationalizability for social environments," Games and Economic Behavior, Elsevier, vol. 49(1), pages 135-156, October. [Downloadable!] (restricted)
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  3. Ana Mauleon & Vincent Vannetelbosch, 2004. "Farsightedness and Cautiousness in Coalition Formation Games with Positive Spillovers," Theory and Decision, Springer, vol. 56(3), pages 291-324, 05. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Frank H. Page, Jr. & Myrna H. Wooders, 2006. "Strategic Basins of Attraction, the Path Dominance Core, and Network Formation Games," Working Papers 0614, Department of Economics, Vanderbilt University. [Downloadable!]
    Other versions:
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