original papers: Network formation with sequential demands

Sergio Currarini () and Massimo Morelli

Review of Economic Design, 2000, vol. 5, issue 3, pages 229-249

Abstract: This paper introduces a non-cooperative game-theoretic model of sequential network formation, in which players propose links and demand payoffs. Payoff division is therefore endogenous. We show that if the value of networks satisfies size monotonicity, then each and every equilibrium network is efficient. The result holds not only when players make absolute participation demands, but also when they are allowed to make link-specific demands.

Keywords: Link formation; efficient networks; payoff division (search for similar items in EconPapers)
JEL-codes: C7 (search for similar items in EconPapers)
Date: 2000 Written

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