This paper addresses the existence of Nash equilibria in one-way flow or directed network models in a number of different settings. In these models players form costly links with other players and obtain resources from them through the directed path connecting them. We find that heterogeneity in the costs of establishing links play a crucial role in the existence of Nash networks. We also provide conditions for the existence of Nash networks in models where costs and values of links are heterogeneous.
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number
751.
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
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