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Connections Among Farsighted Agents

Authors


  • Gilles Grandjean, CEREC, Facultés universitaires Saint-Louis, Boulevard du Jardin Botanique 43, B-1000 Brussels, Belgium (grandjean@fusl.ac.be). Ana Mauleon, CEREC, Facultés universitaires Saint-Louis, Boulevard du Jardin Botanique 43, B-1000 Brussels, Belgium. Vincent Vannetelbosch, CORE, Université catholique de Louvain, voie du Roman Pays 34, B-1348 Louvain-la-Neuve, Belgium (vincent.vannetelbosch@uclouvain.be).

  •  We thank two anonymous referees for helpful comments. Vincent Vannetelbosch and Ana Mauleon are Research Associates of the National Fund for Scientific Research (FNRS). Gilles Grandjean is Postdoctoral Researcher of the National Fund for Scientific Research (FNRS). Financial support from the Spanish Ministry of Sciences and Innovation under the project ECO 2009-09120, support from the Belgian French Community’s program Action de Recherches Concertée 05/10-331, and support of a SSTC grant from the Belgian Federal government under IAP contract P6/09 are gratefully acknowledged.

Abstract

We study the stability of social and economic networks when players are farsighted. In particular, we examine whether the networks formed by farsighted players are different from those formed by myopic players. We adopt the notion of pairwise farsightedly stable sets (Herings, Mauleon, and Vannetelbosch 2009). We first show that under the componentwise egalitarian allocation rule, the set of strongly efficient networks and the set of pairwise (myopically) stable networks that are immune to coalitional deviations are the unique pairwise farsightedly stable set if and only if the value function is top convex. We then investigate in some classical models of social and economic networks whether the pairwise farsightedly stable sets of networks coincide or not with the set of pairwise (myopically) stable networks and the set of strongly efficient networks.

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