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Stability in Network Formation Games with Streams of Payoffs: An Experimental Study

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Abstract

We run a novel network formation experiment with a stream of payoffs and relatively unstructured link formation process, and test the performance of a number of theoretical stability concepts in this environment. We focus especially on the issue of myopic versus farsighted behaviour in network formation. A subtle treatment variation demonstrates clearly the power of myopic stability concepts in identifying the most stable networks. However, we also find support for farsighted concepts of stability, especially those that assume players are pessimistic about the eventual outcome of a deviation.

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  • Mariya Teteryatnikova & James Tremewan, 2015. "Stability in Network Formation Games with Streams of Payoffs: An Experimental Study," Vienna Economics Papers vie1508, University of Vienna, Department of Economics.
    • Handle: RePEc:vie:viennp:vie1508
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    Cited by:

    1. Mariya Teteryatnikova, 2015. "Cautious Farsighted Stability in Network Formation Games with Streams of Payoffs," Vienna Economics Papers 1509, University of Vienna, Department of Economics.
    2. Mariya Teteryatnikova, 2021. "Cautious farsighted stability in network formation games with streams of payoffs," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(4), pages 829-865, December.
    3. Tremewan, James & Vanberg, Christoph, 2016. "The dynamics of coalition formation – A multilateral bargaining experiment with free timing of moves," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 33-46.

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    More about this item

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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