Network Exchange As A Cooperative Game

This paper presents parallels between network exchange experiments and N -person cooperative games with transferable utility, to show how game theory can assist network exchange researchers, not only in predicting outcomes, but in properly specifying the scope of their models. It illustrates how utility, strategy and c-games , concepts found in game theory, could be used by exchange theorists to help them reflect on their models and improve their research design. One game theoretic solution concept, the kernel, is compared to recent network exchange algorithms as an illustration of how easy it is to apply game theory to the exchange network situation. It also illustrates some advantages of using a game theory solution concept to model network exchange.