Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53190 
Year of Publication: 
2009
Series/Report no.: 
Nota di Lavoro No. 30.2009
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
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.
Subjects: 
Farsighted Players
Stability
Efficiency
Connections Model
Buyerseller Networks
JEL: 
A14
C70
D20
Document Type: 
Working Paper

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