Advertisement

Review of Economic Design

, Volume 5, Issue 3, pp 229–249 | Cite as

Network formation with sequential demands

  • Sergio Currarini
  • Massimo Morelli
Original papers

Abstract.

This paper introduces a non-cooperative game-theoretic model of sequential network formation, in which players propose links and demand payoffs. Payoff division is therefore endogenous. We show that if the value of networks satisfies size monotonicity, then each and every equilibrium network is efficient. The result holds not only when players make absolute participation demands, but also when they are allowed to make link-specific demands.

JEL classification: C7 
Key words: Link formation, efficient networks, payoff division 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer-Verlag Berlin Heidelberg 2000

Authors and Affiliations

  • Sergio Currarini
    • 1
  • Massimo Morelli
    • 2
  1. 1.Department of Economics, University of Venice, Cannaregio N 873, 30121 Venezia, Italy (e-mail: s.currarini@rhbnc.ac.uk) IT
  2. 2.Department of Economics, Ohio State University, 425 ARPS Hall, 1945 North High Street,Columbus, OH 43210, USA (e-mail: morelli@economics.sbs.ohio-state.edu) US

Personalised recommendations