Networks with Group Counterproposals
18 Pages Posted: 27 Aug 2008
Date Written: July 2008
We study two n-player sequential network formation games with externalities. Link formation is tied to simultaneous transfer selection in a Nash demand like game in each period. Players in groups can counterpropose. We give necessary and sufficient conditions for efficiency in terms of cyclical monotonicity. The n-player group version always yields efficiency.
Keywords: Efficiency, Bargaining Protocol, Counterproposals, Network Formation, Transfers, Externalities, Groups, Coalitions
JEL Classification: C71, C72, C73, C78
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