Network Formation with Sequential Demands

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Network Formation with Sequential Demands

Author Info

Sergio Currarini
Massimo Morelli (Department of Economic Science, University of Venice)

Additional information is available for the following registered author(s):

Sergio Currarini

Abstract

This paper introduces a non-cooperative game-theoretic model of sequential network formation, in which players propose links and demand payoffs. Payoff division is therefore endogenous. We show that if the value of networks satisfies size-monotonicity, then each and every equilibrium network is efficient. Formation of networks satisfies size-monotonicity, then each and equilibrium network is efficient. Formation of networks through bilateral every negotiations (link-specific demands) and through absolute participation demands turn out to have the same efficiency properties. The result do not extend to the case in which players can only demand relative shares

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Publisher Info
Paper provided by Department of Economics, Royal Holloway University of London in its series Royal Holloway, University of London: Discussion Papers in Economics with number 99/2.

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Length: 33 pages
Date of creation: Feb 2000
Date of revision: Feb 2000
Handle: RePEc:hol:holodi:9902

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Find related papers by JEL classification:
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

This paper has been announced in the following NEP Reports:

NEP-ALL-2001-06-14 (All new papers)
NEP-EVO-2001-06-14 (Evolutionary Economics)
NEP-NET-2001-06-14 (Network Economics)
NEP-REG-2001-06-14 (Regulation)

Cited by:
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Ricardo Nieva, 2008. "Networks with Group Counterproposals," Working Papers 2008.61, Fondazione Eni Enrico Mattei. [Downloadable!]
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