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Networks and Farsighted Stability

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  • Page, Frank H., Jr.
  • Wooders, Myrna H.
  • Kamat, Samir

Abstract

We provide a new framework for the analysis of network formation and demonstrate the existence of farsightedly consistent directed networks. Our framework extends the standard notion of a network and also introduces the notion of a supernetwork. A supernetwork is made up of a collection of directed networks (the nodes) and represents (via the arcs connecting the nodes) preferences and rules governing network formation. By extending Chwe’s 1994 result on the nonemptiness of farsightedly consistent sets, we show that for any supernetwork there exists a nonempty subset of farsightedly consistent directed networks.

Suggested Citation

  • Page, Frank H., Jr. & Wooders, Myrna H. & Kamat, Samir, 2004. "Networks and Farsighted Stability," Economic Research Papers 269395, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:269395
    DOI: 10.22004/ag.econ.269395
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    References listed on IDEAS

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    Keywords

    Agricultural and Food Policy; Industrial Organization;

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General

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