Potential Maximizers and Network Formation

M. Slikker, P.K. Dutta, C.G.A.M. van den Nouweland, S.H. Tijs

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Abstract

In this paper we study the formation of cooperation structures in superadditive cooperative TU-games.Cooperation structures are represented by hypergraphs.The formation process is modelled as a game in strategic form, where the payoffs are determined according to a weighted (extended) Myerson value.This class of solution concepts turns out to be the unique class resulting in weighted potential games.The argmax set of the weighted potential predicts the formation of the complete structure and structures payoff-equivalent to the complete structure.As by-products we obtain a representation theorem of weighted potential games in terms of weighted Shapley values and a characterization of the weighted (extended) Myerson values.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages19
Volume758
Publication statusPublished - 1998

Publication series

NameFEW Research Memorandum
Volume758

Keywords

  • game theory

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  • Cite this

    Slikker, M., Dutta, P. K., van den Nouweland, C. G. A. M., & Tijs, S. H. (1998). Potential Maximizers and Network Formation. (FEW Research Memorandum; Vol. 758). Microeconomics.