Farsightedly basic networks
Page, Frank H., Wooders, Myrna Holtz and Kamat, Samir (2004) Farsightedly basic networks. Working Paper. University of Warwick, Department of Economics, Coventry.
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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 notion of a farsightedly basic network, as well as the notion of a farsighted basis, and we show that all supernetworks possess a farsighted basis. A farsightedly basic network contained in the farsighted basis of a given supernetwork represents a possible final resting point (or absorbing state) of a network formation process in which agents behave farsightedly. Given the supernetwork representation of the rules governing network formation and the preferences of the individuals, a farsighted basis contains networks which are likely to emerge and persist if individuals behave farsightedly.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HM Sociology
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Business networks, Organizational sociology, Economics -- Sociological aspects, Organizational behavior, Social stability|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Number of Pages:||23|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
|Description:||Original version, July 2001, this version, July 2004.|
|Version or Related Resource:||Page, F.H., Wooders, M.H. and Kamat, S. (2003). Networks and farsighted stability. [Coventry] : University of Warwick, Economics Department. (Warwick economic research papers, no.689).|
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