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original papers : Network formation with sequential demands

Author

Listed:
  • Sergio Currarini
  • Massimo Morelli
Abstract
This paper introduces a non-cooperative game-theoretic model of sequential network formation, in which players propose links and demand payoffs. Payoff division is therefore endogenous. We show that if the value of networks satisfies size monotonicity, then each and every equilibrium network is efficient. The result holds not only when players make absolute participation demands, but also when they are allowed to make link-specific demands.

Suggested Citation

  • Sergio Currarini & Massimo Morelli, 2000. "original papers : Network formation with sequential demands," Review of Economic Design, Springer;Society for Economic Design, vol. 5(3), pages 229-249.
    • Handle: RePEc:spr:reecde:v:5:y:2000:i:3:p:229-249
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    More about this item

    Keywords

    Link formation; efficient networks; payoff division;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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