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Stochastic Stability in Network with Decay

  • Francesco Feri

    (Ca’ Foscari University)

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    This paper considers a simple communication network characterized by an endogenous architecture and an imperfect transmission of information. We analyze the process of network formation in a dynamic framework where self – interested individuals can form or delete links and, occasionally, are doing mistakes. Then, using stochastic stability, we identify which network structures the formation process will converge to.

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    File URL: http://www.feem.it/userfiles/attach/Publication/NDL2005/NDL2005-040.pdf
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    Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2005.40.

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    Date of creation: Mar 2005
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    Handle: RePEc:fem:femwpa:2005.40
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    1. Fernando Vega Redondo & Sanjeev Goyal, 2001. "Learning, Network Formation And Coordination," Working Papers. Serie AD 2001-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    2. H. Peyton Young, 1996. "The Economics of Convention," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 105-122, Spring.
    3. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
    4. 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.
    5. Matthew O. Jackson & Alison Watts, 2000. "On the Formation of Interaction Networks in Social Coordination Games," Econometric Society World Congress 2000 Contributed Papers 0778, Econometric Society.
    6. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-71, September.
    7. Arthur J Robson & Fernando Vega-Redondo, 1999. "Efficient Equilibrium Selection in Evolutionary Games with Random Matching," Levine's Working Paper Archive 2112, David K. Levine.
    8. Karandikar, Rajeeva & Mookherjee, Dilip & Ray, Debraj & Vega-Redondo, Fernando, 1998. "Evolving Aspirations and Cooperation," Journal of Economic Theory, Elsevier, vol. 80(2), pages 292-331, June.
    9. Kandori Michihiro & Rob Rafael, 1995. "Evolution of Equilibria in the Long Run: A General Theory and Applications," Journal of Economic Theory, Elsevier, vol. 65(2), pages 383-414, April.
    10. Selten,Reinhard, . "Evolution,learning and economic behaviour," Discussion Paper Serie B 132, University of Bonn, Germany.
    11. Jackson, Matthew O., 1998. "The Evolution of Social and Economic Networks," Working Papers 1044, California Institute of Technology, Division of the Humanities and Social Sciences.
    12. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
    13. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    14. Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
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