Sequential competition and the strategic origins of preferential attachment
Antoine Mandel and
Xavier Venel
Additional contact information
Xavier Venel: LUISS - Libera Università Internazionale degli Studi Sociali Guido Carli [Roma]
PSE-Ecole d'économie de Paris (Postprint) from HAL
Abstract:
We analyze whether random network formation processes, such as preferential attachment, can emerge as the outcome of strategic behaviour. We represent network formation as an extensive game in which players sequentially form links as they enter the network. In this setting, we investigate under which conditions subgame perfect equilibria of the game are observationally equivalent with random network formation process. We put forward two structural conditions that are necessary in this respect. First, players must have some form of imperfect information as randomization is purposeful only if its realization is not perfectly observed by the other players. Second, there must be some form of competition between a player and its successors: a player has incentives to reduce the information available to its successors only to the extent that their objectives are in opposition. Accordingly, we put forward a class of games where players compete with their predecessors and their successors for the costs and benefits induced by link formation and show that subgame perfect equilibria of this game are observationally equivalent with random network formation process. In particular, when linkage costs are inversely proportional to the degree of a node, equilibrium play induces a preferential attachment process. This provides a positive answer to the question of the existence of strategic foundations for preferential attachment. However the very specific conditions requiredfor the observational equivalence to hold suggest that preferential attachment can be explained by strategic considerations only in a limited number of situations.
Keywords: Game theory; Socio-economic networks; Endogenous network formation; Preferential attachment; Extensive games (search for similar items in EconPapers)
Date: 2022-11
New Economics Papers: this item is included in nep-gth and nep-net
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03881328v1
References: Add references at CitEc
Citations:
Published in International Journal of Game Theory, 2022, 51 (3-4), pp.483-508. ⟨10.1007/s00182-021-00801-0⟩
Downloads: (external link)
https://shs.hal.science/halshs-03881328v1/document (application/pdf)
Related works:
Journal Article: Sequential competition and the strategic origins of preferential attachment (2022) 
Working Paper: Sequential competition and the strategic origins of preferential attachment (2022) 
Working Paper: Sequential competition and the strategic origins of preferential attachment (2022) 
Working Paper: Sequential competition and the strategic origins of preferential attachment (2018) 
Working Paper: Sequential competition and the strategic origins of preferential attachment (2018) 
Working Paper: Seqential competition and the strategic origins of preferential attachment (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:hal:pseptp:halshs-03881328
DOI: 10.1007/s00182-021-00801-0
Access Statistics for this paper
More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL
Bibliographic data for series maintained by Caroline Bauer ().