| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 984481 | Research in Economics | 2011 | 12 Pages |
We present a network formation game whose equilibria are undirected networks. Every connected couple contributes to the aggregate payoff by a fixed quantity, and the outcome is split between players according to the Myerson value allocation rule. This setup shows a wide multiplicity of non-empty equilibria, all of them connected. We show that the efficient equilibria of the game are either the empty network, or a network whose diameter does not exceed a threshold of 8 (i.e. there are no two nodes with a distance greater than 8).
Research highlights► A network formation game whose equilibria are undirected networks. ► Every connected couple contributes to the aggregate payoff by a fixed quantity. ► The outcome is split between players according to the Myerson value allocation rule. ► This setup shows wide multiplicity of non-empty equilibria, all of them connected. ► The diameter of the efficient equilibria does not exceed a threshold of 8.
