Stochastic stability in one-way flow networks

Zhiwei Cui, Shouyang Wang, Jin Zhang and Lei Zu

Mathematical Social Sciences, 2013, vol. 66, issue 3, 410-421

Abstract: This paper considers one-way flow network formation games in which transmission through a series of agents is subject to decay. We analyze the myopic best-response dynamics of network formation games, occasionally perturbed by state-dependent random noises. Specifically, if an agent is isolated or has a direct neighbor who is better paid, it is more likely that the agent will make mistakes. Our main result identifies that only empty and wheel networks are candidates for long-term outcomes.

Date: 2013
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:66:y:2013:i:3:p:410-421

DOI: 10.1016/j.mathsocsci.2013.09.003

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