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Network Potentials

  • Subhadip Chakrabarti
  • Robert P. Gilles

A network payoff function assigns a utility to all participants in a (social) network. In this paper we discuss properties of such network payoff functions that guarantee the existence of certain types of pairwise stable networks and the convergence of certain network formation processes. In particular we investigate network payoff functions that admit an exact network potential or an ordinal network potential. We relate these network potentials to exact and ordinal potentials of a non-cooperative network formation game based on consent in link formation. Our main results extend and strengthen the current insights in the literature on game theoretic approaches to social network formation.

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File URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse28_2005.pdf
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Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse28_2005.

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Length: 47
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:bon:bonedp:bgse28_2005
Contact details of provider: Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de

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  1. repec:dgr:kubcen:200470 is not listed on IDEAS
  2. Dutta, Bhaskar & Mutuswami, Suresh, 1996. "Stable Networks," Working Papers 971, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. Matthew O. Jackson & Asher Wolinsky, 1994. "A Strategic Model of Social and Economic Networks," Discussion Papers 1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Jackson, Matthew O. & van den Nouweland, Anne, 2005. "Strongly stable networks," Games and Economic Behavior, Elsevier, vol. 51(2), pages 420-444, May.
  5. Goyal, Sanjeev & Vega-Redondo, Fernando, 2007. "Structural holes in social networks," Journal of Economic Theory, Elsevier, vol. 137(1), pages 460-492, November.
  6. Slikker, Marco & Gilles, Robert P. & Norde, Henk & Tijs, Stef, 2005. "Directed networks, allocation properties and hierarchy formation," Mathematical Social Sciences, Elsevier, vol. 49(1), pages 55-80, January.
  7. Qin, Cheng-Zhong, 1996. "Endogenous Formation of Cooperation Structures," Journal of Economic Theory, Elsevier, vol. 69(1), pages 218-226, April.
  8. Robert P. Gilles & Sudipta Sarangi, 2006. "Building Social Networks," Discussion Papers of DIW Berlin 642, DIW Berlin, German Institute for Economic Research.
  9. Bloch, Francis & Jackson, Matthew O., 2007. "The formation of networks with transfers among players," Journal of Economic Theory, Elsevier, vol. 133(1), pages 83-110, March.
  10. Jackson, Matthew O. & Watts, Alison, 2002. "The Evolution of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 106(2), pages 265-295, October.
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