Limited farsightedness in network formation

Limited Farsightedness in Network Formation

Pairwise stability Jackson and Wolinsky [1996] is the standard stability concept in network formation. It assumes myopic behavior of the agents in the sense that they do not forecast how others might react to their actions. Assuming that agents are perfectly farsighted, related stability concepts have been proposed. We design a simple network formation experiment to test these extreme theories,...

Farsightedness in Coalition Formation

An Experimental Study of Network Formation with Limited Observation∗

Many social and economic networks emerge among actors that only partially observe the network when forming network ties. We ask: what types of network architectures form when actors have limited observation, and does limited observation lead to less effi cient structures? We report numerous results from a laboratory experiment that varies both network observation and the cost of forming links. ...

Evolutionary farsightedness in international environmental agreements

This paper proposes a dynamic game model of the process through which countries join international environmental agreements (IEAs). The model assumes that both the number of signatory countries and the stock of accumulated pollution evolve over time, as a result of countries’ emission and membership decisions. The evolution of the number of signatory countries is described by a discrete-time re...

ANA MAULEON and VINCENT VANNETELBOSCH FARSIGHTEDNESS AND CAUTIOUSNESS IN COALITION FORMATION GAMES WITH POSITIVE SPILLOVERS*

We adopt the largest consistent set defined by Chwe (1994; J. Econ. Theory 63: 299–325) to predict which coalition structures are possibly stable when players are farsighted. We also introduce a refinement, the largest cautious consistent set, based on the assumption that players are cautious. For games with positive spillovers, many coalition structures may belong to the largest consistent set...