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Stochastic stability in one-way flow networks

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  • Cui, Zhiwei
  • Wang, Shouyang
  • Zhang, Jin
  • Zu, Lei

Abstract

This paper considers one-way flow network formation games in which transmission through a series of agents is subject to decay. We analyze the myopic best-response dynamics of network formation games, occasionally perturbed by state-dependent random noises. Specifically, if an agent is isolated or has a direct neighbor who is better paid, it is more likely that the agent will make mistakes. Our main result identifies that only empty and wheel networks are candidates for long-term outcomes.

Suggested Citation

  • Cui, Zhiwei & Wang, Shouyang & Zhang, Jin & Zu, Lei, 2013. "Stochastic stability in one-way flow networks," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 410-421.
    • Handle: RePEc:eee:matsoc:v:66:y:2013:i:3:p:410-421
    DOI: 10.1016/j.mathsocsci.2013.09.003
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    Cited by:

    1. De Jaegher, K. & Kamphorst, J.J.A., 2015. "Minimal two-way flow networks with small decay," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 217-239.
    2. Tang Yao & Yigang Wei & Jianhong Zhang & Yani Wang & Yunjiang Yu & Wenyang Huang, 2022. "What influences the urban sewage discharge in China? The effect of diversified factors on the urban sewage discharge in different regions of China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6099-6135, May.
    3. Filippo Vergara Caffarelli, 2017. "One-Way Flow Networks with Decreasing Returns to Linking," Dynamic Games and Applications, Springer, vol. 7(2), pages 323-345, June.

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