Efficient Partnership Formation In Networks

Francis Bloch, Bhaskar Dutta and Mihai Manea ()
Additional contact information
Mihai Manea: Stony Brook University

No 9, Working Papers from Ashoka University, Department of Economics

Abstract: We analyze the formation of partnerships in social networks. Players need favors at random times and ask their neighbors in the network to form exclusive long-term partnerships that guarantee reciprocal favor exchange. Refusing to provide a favor results in the automatic removal of the underlying link. Players agree to provide the ï¬ rst favor in a partnership only if they otherwise face the risk of eventual isolation. In equilibrium, players essential for realizing every maximum matching can avoid this risk and enjoy higher payoffsthaninessentialplayers.Althoughthesearchforpartnersisdecentralizedandreflects local partnership opportunities, the strength of essential players drives efficient partnership formation in every network. Equilibrium behavior is determined by the classiï¬ cation of nodes in the Gallai-Edmonds decomposition of the underlying network.

Keywords: decentralized; markets; efficiency; favor; exchange; Gallai-Edmonds; decomposition; maximum; matchings; networks; partnerships; under-demanded. (search for similar items in EconPapers)
Pages: 35
Date: 2018-02-02
New Economics Papers: this item is included in nep-gth, nep-mic and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://dp.ashoka.edu.in/ash/wpaper/paper09_0.pdf (application/pdf)

Related works:
Journal Article: Efficient partnership formation in networks (2019)
Working Paper: Efficient partnership formation in networks (2019)
Working Paper: Efficient partnership formation in networks (2019)
Working Paper: EFFICIENT PARTNERSHIP FORMATION IN NETWORKS (2018)
Working Paper: Efficient Partnership Formation In Networks (2018)
Working Paper: Efficient Partnership Formation in Networks (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ash:wpaper:09

Access Statistics for this paper

More papers in Working Papers from Ashoka University, Department of Economics
Bibliographic data for series maintained by Ashoka University ().