Network formation with NIMBY constraints

Lukas Block

Energy Economics, 2023, vol. 119, issue C

Abstract: The expansion of power networks is often hampered by local protests against certain power lines (’not-in-my-backyard’). For that matter, we study the structure of these networks with an application of a network formation game in order to determine the emergence of such a protest. We examine the existence of Nash-stable networks and their characteristics, when no player wants to make an alteration. Stability within this game is only reached if each player is sufficiently connected to a power source but is not linked to more players than necessary. In addition, we introduce the Nash-stable network algorithm which constructs a Nash-stable network with heterogeneous players.

Keywords: Network formation; NIMBY; Power networks; Nash stability (search for similar items in EconPapers)
JEL-codes: D85 H54 L52 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:119:y:2023:i:c:s0140988322005990

DOI: 10.1016/j.eneco.2022.106470

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