Connections Among Farsighted Agents

33 Pages Posted: 5 Aug 2009

See all articles by Vincent J. Vannetelbosch

Vincent J. Vannetelbosch

Center for Operations Research and Econometrics (CORE)

Gilles Grandjean

Université catholique de Louvain

Ana Mauleon

Université Saint-Louis - Bruxelles; Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Date Written: August 3, 2009

Abstract

We study the stability of social and economic networks when players are farsighted. In particular, we examine whether the networks formed by farsighted players are different from those formed by myopic players. We adopt Herings, Mauleon and Vannetelbosch’s (Games and Economic Behavior, forthcoming) notion of pairwise farsightedly stable set. We first investigate in some classical models of social and economic networks whether the pairwise farsightedly stable sets of networks coincide with the set of pairwise (myopically) stable networks and the set of strongly efficient networks. We then provide some primitive conditions on value functions and allocation rules so that the set of strongly efficient networks is the unique pairwise farsightedly stable set. Under the componentwise egalitarian allocation rule, the set of strongly efficient networks and the set of pairwise (myopically) stable networks that are immune to coalitional deviations are the unique pairwise farsightedly stable set if and only if the value function is top convex.

Keywords: farsighted players, stability, efficiency, connections model, buyerseller networks

JEL Classification: A14, C7, D2

Suggested Citation

Vannetelbosch, Vincent J. and Grandjean, Gilles and Mauleon Echeverria, Ana Carmen, Connections Among Farsighted Agents (August 3, 2009). FEEM Working Paper No. 30 2009. Available at SSRN: https://ssrn.com/abstract=1443143 or http://dx.doi.org/10.2139/ssrn.1443143

Vincent J. Vannetelbosch (Contact Author)

Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
1348 Louvain-la-Neuve, 1348
Belgium

Gilles Grandjean

Université catholique de Louvain ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

Ana Carmen Mauleon Echeverria

Université Saint-Louis - Bruxelles ( email )

Brussels, 1000
Belgium

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

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