Networks and Farsighted Stability

Samir Kamat, Frank Page and Myrna Wooders

No 561, Econometric Society 2004 North American Winter Meetings from Econometric Society

Abstract: Networks and Farsighted Stability By Frank H. Page, Jr. Department of Finance University of Alabama Tuscaloosa, AL 35487 USA fpage@cba.ua.edu Myrna H. Wooders Department of Economics University of Warwick Coventry CV4 7AL UK M.Wooders@warwick.ac.uk Samir Kamat Portfolio Management Group Wachovia Corporation Atlanta, GA 30303 USA samir.kamat2@wachovia.com The main contribution of this paper is to provide a framework in which the notion of farsighted stability for games, introduced by Chwe (1994), can be applied to directed networks. In particular, we introduce the notion of a supernetwork. A supernetwork is made up of a collection of directed networks (the nodes) and uniquely represents (via the arcs connecting the nodes) agent preferences and the rules governing network formation. By reformulating Chwe's basic result on the nonemptiness of farsightedly stable sets, we show that for any supernetwork (i.e., for any collection of directed networks and any collection of rules governing network formation), there exists a farsightedly stable directed network. We also introduce the notion of a Nash network relative to a given supernetwork, as well as the notions of symmetric, nonsimultaneous, and decomposable supernetworks. To illustrate the utility of our framework, we present several examples of supernetworks, compute the farsightedly stable networks, and the Nash networks.

Keywords: network formation; farsighted stability; Nash networks (search for similar items in EconPapers)
JEL-codes: C72 D20 (search for similar items in EconPapers)
Date: 2004-08-11
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Networks and farsighted stability (2005)
Working Paper: Networks and Farsighted Stability (2004)
Working Paper: Networks and Farsighted Stability (2003)
Working Paper: Networks and Farsighted Stability (2003)
Working Paper: Networks and Farsighted Stability (2002)
Working Paper: NETWORKS AND FARSIGHTED STABILITY (2002)
Working Paper: NETWORKS AND FARSIGHTED STABILITY (2001)
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:ecm:nawm04:561

Access Statistics for this paper

More papers in Econometric Society 2004 North American Winter Meetings from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum (baum@bc.edu).