Strongly Stable Networks

Matthew Jackson and Anne van den Nouweland
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Anne van den Nouweland: University of Oregon

Microeconomics from University Library of Munich, Germany

Abstract: We analyze the formation of networks among individuals. In particular, we examine the existence of networks that are stable against changes in links by any coalition of individuals. We show that to investigate the existence of such strongly stable networks one can restrict focus on a component-wise egalitarian allocation of value. We show that when such strongly stable networks exist they coincide with the set of efficient networks (those maximizing the total productive value). We show that the existence of strongly stable networks is equivalent to core existence in a derived cooperative game and use that result to characterize the class of value functions for which there exist strongly stable networks via a ``top convexity'' condition on the value function on networks. We also consider a variation on strong stability where players can make side payments, and examine situations where value functions may be non- anonymous -- depending on player labels.

Keywords: Networks; Network formation; strong stability; core; strong equilibrium; efficiency (search for similar items in EconPapers)
JEL-codes: A14 C71 C72 D20 (search for similar items in EconPapers)
Date: 2002-11-04
New Economics Papers: this item is included in nep-gth
Note: Type of Document - pdf
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Strongly stable networks (2005)
Working Paper: Strongly Stable Networks (2002)
Working Paper: Strongly Stable Networks (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpmi:0211006

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