Limited Observation in Mutual Consent Networks
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This paper studies mutual consent social networks in which individuals imperfectly monitor others' network ties and have incomplete information about the benefits of network participation. I introduce the Conjectural Pairwise Stability concept, which generalizes Jackson and Wolinsky's (1996) Pairwise Stability concept to allow for limited observation, and apply it to a specific mutual consent network formation game. While limited observation generally leads to the existence of less efficient stable networks, I find that it can also lead to the existence of efficient stable networks. Moreover, stability restrictions considered in previous work lose their refining power as observation becomes more limited.
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2018 ◽
Vol 155
◽
pp. 445-457
Keyword(s):
Keyword(s):
2018 ◽
Vol 17
(10)
◽
pp. 6544-6558
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