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Network formation under mutual consent and costly communication

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  • Gilles, Robert P.
  • Sarangi, Sudipta

Abstract

We consider two different approaches to describe the formation of social networks under mutual consent and costly communication. First, we consider a network-based approach; in particular Jackson-Wolinsky's concept of pairwise stability. Next, we discuss a non-cooperative game-theoretic approach, through a refinement of the Nash equilibria of Myerson's consent game. This refinement, denoted as monadic stability, describes myopically forward looking behavior of the players. We show through an equivalence that the class of monadically stable networks is a strict subset of the class of pairwise stable networks that can be characterized fully by modifications of the properties defining pairwise stability.

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  • Gilles, Robert P. & Sarangi, Sudipta, 2010. "Network formation under mutual consent and costly communication," Mathematical Social Sciences, Elsevier, vol. 60(3), pages 181-185, November.
    • Handle: RePEc:eee:matsoc:v:60:y:2010:i:3:p:181-185
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    References listed on IDEAS

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    1. Page, Frank Jr. & Wooders, Myrna H. & Kamat, Samir, 2005. "Networks and farsighted stability," Journal of Economic Theory, Elsevier, vol. 120(2), pages 257-269, February.
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    1. Gilles, R.P. & Lazarova, E.A. & Ruys, P.H.M., 2011. "Economic Institutions and Stability : A Network Approach," Other publications TiSEM a3203e25-2d8b-414b-8ae3-3, Tilburg University, School of Economics and Management.
    2. Chenghong Luo & Ana Mauleon & Vincent Vannetelbosch, 2022. "Coalition-proof stable networks," Review of Economic Design, Springer;Society for Economic Design, vol. 26(2), pages 185-209, June.
    3. Olaizola, Norma & Valenciano, Federico, 2015. "Unilateral vs. bilateral link-formation: A transition without decay," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 13-28.
    4. Robert P. Gilles, 2019. "Building social networks under consent: A survey," Papers 1910.11693, arXiv.org, revised Apr 2020.
    5. Pramod C. Mane & Kapil Ahuja & Nagarajan Krishnamurthy, 2020. "Stability, efficiency, and contentedness of social storage networks," Annals of Operations Research, Springer, vol. 287(2), pages 811-842, April.
    6. Gilles, Robert P. & Chakrabarti, Subhadip & Sarangi, Sudipta, 2012. "Nash equilibria of network formation games under consent," Mathematical Social Sciences, Elsevier, vol. 64(2), pages 159-165.
    7. Robert P. Gilles & Emiliya A. Lazarova & Pieter H.M. Ruys, 2011. "Economic Institutions and Stability: A Network Approach," Economics Working Papers 11-04, Queen's Management School, Queen's University Belfast.

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