A network formation game for the emergence of hierarchies

Pedro Cisneros-Velarde and Francesco Bullo

PLOS ONE, 2021, vol. 16, issue 8, 1-26

Abstract: We propose a novel network formation game that explains the emergence of various hierarchical structures in groups where self-interested or utility-maximizing individuals decide to establish or severe relationships of authority or collaboration among themselves. We consider two settings: we first consider individuals who do not seek the other party’s consent when establishing a relationship and then individuals who do. For both settings, we formally relate the emerged hierarchical structures with the novel inclusion of well-motivated hierarchy promoting terms in the individuals’ utility functions. We first analyze the game via a static analysis and characterize all the hierarchical structures that can be formed as its solutions. We then consider the game played dynamically under stochastic interactions among individuals implementing better-response dynamics and analyze the nature of the converged networks.

Date: 2021
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0255990

DOI: 10.1371/journal.pone.0255990

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