Limited Farsightedness in Network Formation

The Role of Trust in Costly Network Formation ∗

We consider game theoretic models of social network formation. In this paper we limit our investigation to game theoretic models of network formation that are based on individual actions only. Our approach is based on three simple and realistic principles: (1) Link formation is a binary process of consent. (2) Link formation is costly. (3) The class of network payoff functions should be as gene...

Networks and farsighted stability

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 ...

Farsightedness in Coalition Formation

Strategic basins of attraction, the path dominance core, and network formation games

We introduce a model of network formation whose primitives consist of a feasible set of networks, player preferences, rules of network formation, and a dominance relation on feasible networks. Rules may range from noncooperative, where players may only act unilaterally, to cooperative, where coalitions of players may act in concert. The dominance relation over feasible networks incorporates pla...

Farsightedness in a coalitional Great Fish War

We explore the implications of the farsightedness assumption on the conjectures of players in a coalitional Great Fish War model with symmetric players, derived from the seminal model of Levhari and Mirman (1980). The farsightedness assumption for players in a coalitional game acknowledges the fact that a deviation from a single player will lead to the formation of a new coalition structure as ...