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Networks and farsighted stability
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Page, Frank H., Wooders, Myrna Holtz and Kamat, Samir (2003) Networks and farsighted stability. Working Paper. Coventry: University of Warwick, Department of Economics. (Warwick economic research papers).

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Abstract
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 of 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 
Date:  October 2003 
Number:  No.689 
Number of Pages:  26 
Status:  Not Peer Reviewed 
Access rights to Published version:  Open Access 
Description:  Original version, July 2001, this version, October 2003. 
Adapted As:  Page, F.H., Wooders, M.H. and Kamat, S. (2004). Farsightedly basic networks. [Coventry] : University of Warwick, Economics Department. (Warwick economic research papers, no.702). 
Version or Related Resource:  Revised version of: Page, F.H., Wooders, M.H. and Kamat, S. (2001). Networks and Farsighted Stability. [Coventry] : University of Warwick, Economics Department. (Warwick economic research papers, no.621). 
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URI:  http://wrap.warwick.ac.uk/id/eprint/1498 
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