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Network Exchange As A Cooperative Game

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  • Elisa Jayne Bienenstock
  • Phillip Bonacich

Abstract

This paper presents parallels between network exchange experiments and N -person cooperative games with transferable utility, to show how game theory can assist network exchange researchers, not only in predicting outcomes, but in properly specifying the scope of their models. It illustrates how utility, strategy and c-games , concepts found in game theory, could be used by exchange theorists to help them reflect on their models and improve their research design. One game theoretic solution concept, the kernel, is compared to recent network exchange algorithms as an illustration of how easy it is to apply game theory to the exchange network situation. It also illustrates some advantages of using a game theory solution concept to model network exchange.

Suggested Citation

  • Elisa Jayne Bienenstock & Phillip Bonacich, 1997. "Network Exchange As A Cooperative Game," Rationality and Society, , vol. 9(1), pages 37-65, February.
    • Handle: RePEc:sae:ratsoc:v:9:y:1997:i:1:p:37-65
    DOI: 10.1177/104346397009001002
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    References listed on IDEAS

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    1. Roger B. Myerson, 1977. "Graphs and Cooperation in Games," Mathematics of Operations Research, INFORMS, vol. 2(3), pages 225-229, August.
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    Cited by:

    1. Falk Armin & Kosfeld Michael, 2012. "It's all about Connections: Evidence on Network Formation," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-36, September.
    2. Rodrigo J. Harrison & Roberto Munoz, 2003. "Stability and Equilibrium Selection in a Link Formation Game," Game Theory and Information 0306004, University Library of Munich, Germany.
    3. Michael Kosfeld, "undated". "Network Experiments," IEW - Working Papers 152, Institute for Empirical Research in Economics - University of Zurich.
    4. Phillip Bonacich, 1997. "Explanation And Prediction," Rationality and Society, , vol. 9(3), pages 373-377, August.
    5. Matthew O. Jackson, 2002. "The Stability and Efficiency of Economic and Social Networks," Microeconomics 0211011, University Library of Munich, Germany.
    6. Messan Agbaglah, 2017. "Overlapping coalitions, bargaining and networks," Theory and Decision, Springer, vol. 82(3), pages 435-459, March.
    7. Matthew O. Jackson, 2003. "A survey of models of network formation: Stability and efficiency," Working Papers 1161, California Institute of Technology, Division of the Humanities and Social Sciences.
    8. Elisa Jayne Bienenstock, 1997. "Response To `Network Games'," Rationality and Society, , vol. 9(3), pages 378-382, August.

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