Networks and Farsighted Stability

Frank Page, Myrna Wooders and Samir Kamat
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Samir Kamat: Portfolio Management Group, Wachovia Corporation

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We make two main contributions to the theory of economic and social network formation. First, we introduce the notion of a network formation network or a supernetwork. Supernetworks provide a framework in which we can formally define and analyze farsightedness in network formation. Second, we introduce a new notion of equilibrium corresponding to farsightedness. In particular, we introduce the notion of a farsightedly basic network, as well as the notion of a farsighted basis, and we show that all supernetworks possess a farsighted basis. A farsightedly basic network contained in the farsighted basis of a given supernetwork represents a possible final resting point (or absorbing state) of a network formation process in which agents behave farsightedly. Given the supernetwork representation of the rules governing network formation and the preferences of the individuals, a farsighted basis contains networks which are likely to emerge and persist if individuals behave farsightedly

Keywords: network formation; supernetworks; farsighted stability (search for similar items in EconPapers)
JEL-codes: A14 D20 J00 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2003
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https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp689.pdf

Related works:
Journal Article: Networks and farsighted stability (2005)
Working Paper: Networks and Farsighted Stability (2004)
Working Paper: Networks and Farsighted Stability (2004)
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)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:689

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