Stability of Networks under Level-K Farsightedness
(2015) 15th Annual SAET Conference of the Society for the Advancement of Economic Theory — Location: University of Cambridge, Cambridge (United Kingdom) (27.July.2015)
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- Abstract
- We introduce the concept of a level-K farsighted set to study the infuence of the degree of farsightedness on network stability. We show that a level-K farsighted set always exists and that the level-1 farsighted set G1 is always unique. For generic allocation rules, the set G1 always contains a level-K farsighted set for any K: We provide easy to verify conditions for a set of networks to be a level-K farsighted set and we consider the eciency of net- works in level-K farsighted sets. We show the tractability of the concept by applying it to a model of criminal networks.
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Mauleon, A. (2015). Stability of Networks under Level-K Farsightedness. 15th Annual SAET Conference of the Society for the Advancement of Economic Theory, University of Cambridge, Cambridge (United Kingdom). https://hdl.handle.net/2078.5/190613