Towards a solution concept for network formation games

Andrea Gallo () and Claudia Meroni

Economics Letters, 2021, vol. 198, issue C

Abstract: Network formation games (Myerson, 1991) typically present a multiplicity of Nash equilibria. Some of them are such that mutually beneficial links are not formed, thus inducing networks that are not pairwise stable. We offer an equilibrium refinement for this class of games which naturally involves pairwise stability while guaranteeing admissibility.

Keywords: Network formation games; Equilibrium refinement; Pairwise stability (search for similar items in EconPapers)
JEL-codes: C62 C72 D85 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304316

DOI: 10.1016/j.econlet.2020.109671

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