Bounded Rationality and Repeated Network Formation

S. Beal, Nicolas Querou

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

We define a finite-horizon repeated network formation game with consent and study the differences induced by two levels of individual rationality. Perfectly rational players will remain unconnected at the equilibrium, while nonempty equilibrium networks may form when players are assumed to behave as finite automata of limited complexity. We provide structural properties of the sequences of networks which are likely to form in Nash and subgame perfect Nash equilibria of the repeated game. For instance, players can form totally different connected networks at each period or the sequence of networks can exhibit a total order relationship.
Original languageEnglish
Pages (from-to)71-89
Number of pages19
JournalMathematical Social Sciences
Volume54 (1)
Issue number1
DOIs
Publication statusPublished - Jul 2007

ASJC Scopus subject areas

  • Statistics, Probability and Uncertainty
  • Economics and Econometrics

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