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Existence of Nash networks in one-way flow models

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Abstract

This paper addresses the existence of Nash equilibria in one-way flow models in a number of different settings. In these models players form costly links with other players and obtain resources from them through the directed path connecting them. We find that heterogeneity in the costs of establishing links plays a crucial role for the existence of Nash networks. The paper also provides conditions for the existence of Nash networks in models where costs and values of links are heterogeneous.

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Authors and Affiliations

  1. CREUSET, Jean Monnet University, Saint-Etienne, France

    Pascal Billand & Christophe Bravard

  2. DIW Berlin and Department of Economics, Louisiana State University, Baton Rouge, LA, 70803, USA

    Sudipta Sarangi

Authors
  1. Pascal Billand
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  2. Christophe Bravard
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  3. Sudipta Sarangi
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Corresponding author

Correspondence to Christophe Bravard.

Additional information

We would like to thank an anonymous referee for useful suggestions. We would also like to thank Hans Haller and participants at the AEA Meetings 2007 for helpful comments. Sudipta Sarangi acknowledges the support of NSF grant HSD-0527315 and the hospitality of CREUSET, Jean Monnet University.

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Billand, P., Bravard, C. & Sarangi, S. Existence of Nash networks in one-way flow models. Econ Theory 37, 491–507 (2008). https://doi.org/10.1007/s00199-007-0303-y

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  • DOI: https://doi.org/10.1007/s00199-007-0303-y

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