Quotation Teteryatnikova, Mariya, Tremewan, James. 2019. Myopic and Farsighted Stability in Network Formation Games: An Experimental Study. Economic Theory.


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Abstract

We test the performance of myopic and farsighted stability concepts in a network formation experiment with a stream of payoffs and relatively unstructured link formation process. A subtle treatment variation demonstrates clearly the power of myopic stability concepts in precisely identifying the set of the most stable networks. However, we also find support for the predictions of farsighted concepts of stability, especially those that assume players’ pessimism about the eventual outcome of a deviation. This is the first study to demonstrate that there exist environments where farsighted stability concepts identify empirically stable networks that are not identified by myopic concepts. Thus, myopic stability concepts are not necessarily sufficient to predict all stable outcomes in empirical applications.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Economic Theory
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, VW-B, WH-B
Language English
Title Myopic and Farsighted Stability in Network Formation Games: An Experimental Study
Year 2019
Reviewed? Y
URL https://link.springer.com/article/10.1007/s00199-019-01200-z
DOI https://doi.org/10.1007/s00199-019-01200-z
Open Access Y
Open Access Link https://link.springer.com/article/10.1007/s00199-019-01200-z

Associations

People
Teteryatnikova, Mariya (Details)
External
Tremewan, James (Department of Economics, University of Auckland, New Zealand)
Organization
Institute for Economic Policy and Industrial Economics IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
1152 Game theory (Details)
5370 Industrial economics (Details)
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