Advanced Search
MyIDEAS: Login to save this paper or follow this series

Stable and Efficient Networks with Farsighted Players: the Largest Consistent Set

Contents:

Author Info

  • A Bhattacharya

Abstract

In this paper we study strategic formation of bilateral networks with farsighted players in the classic framework of Jackson and Wolinsky (1996). We use the largest consistent set (LCS)(Chwe (1994)) as the solution concept for stability. We show that there exists a value function such that for every component balanced and anonymous allocation rule, the corresponding LCS does not contain any strongly efficient network. Using Pareto efficiency, a weaker concept of efficiency, we get a more positive result. However, then also, at least one environment of networks (with a component balanced and anonymous allocation rule) exists for which the largest consistent set does not contain any Pareto efficient network. These confirm that the well-known problem of the incompatibility between the set of stable networks and the set of efficient networks persists even in the environment with farsighted players. Next we study some possibilities of resolving this incompatibility.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.york.ac.uk/media/economics/documents/discussionpapers/2009/0934.pdf
File Function: Main text
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, University of York in its series Discussion Papers with number 09/34.

as in new window
Length:
Date of creation:
Date of revision:
Handle: RePEc:yor:yorken:09/34

Contact details of provider:
Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Email:
Web page: http://www.york.ac.uk/economics/
More information through EDIRC

Related research

Keywords: networks; farsighted; largest consistent set;

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. GRANDJEAN, Gilles & MAULEON, Ana & VENNETELBOSCH, Vincent, . "Connections among farsighted agents," CORE Discussion Papers RP -2365, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Frank H. Page, Jr. & Myrna H. Wooders, 2006. "Strategic Basins of Attraction, the Path Dominance Core, and Network Formation Games," Vanderbilt University Department of Economics Working Papers 0614, Vanderbilt University Department of Economics.
  3. Jean-Jacques, HERINGS & Ana, MAULEON & Vincent, VANNETELBOSCH, 2006. "Farsightedly stable networks," Discussion Papers (ECON - Département des Sciences Economiques) 2006046, Université catholique de Louvain, Département des Sciences Economiques.
  4. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
  5. Dutta, Bhaskar & Mutuswami, Suresh, 1996. "Stable Networks," Working Papers 971, California Institute of Technology, Division of the Humanities and Social Sciences.
  6. Dutta, Bhaskar & Ghosal, Sayantan & Ray, Debraj, 2005. "Farsighted network formation," Journal of Economic Theory, Elsevier, vol. 122(2), pages 143-164, June.
  7. Francis Bloch & Bhaskar Dutta, 2008. "Communication networks with endogeneous link strength," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-15, Indian Statistical Institute, New Delhi, India.
  8. Jackson, Matthew O. & van den Nouweland, Anne, 2005. "Strongly stable networks," Games and Economic Behavior, Elsevier, vol. 51(2), pages 420-444, May.
  9. Akihiro Suzuki & Shigeo Muto, 2005. "Farsighted Stability in an n-Person Prisoner’s Dilemma," International Journal of Game Theory, Springer, vol. 33(3), pages 431-445, 09.
  10. Masuda, Takeshi, 2002. "Farsighted stability in average return games," Mathematical Social Sciences, Elsevier, vol. 44(2), pages 169-181, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Herings, P. Jean-Jacques & Mauleon, Ana & Vannetelbosch, Vincent, 2009. "Farsightedly stable networks," Games and Economic Behavior, Elsevier, vol. 67(2), pages 526-541, November.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:yor:yorken:09/34. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Hodgson).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.