Local Two-Stage Myopic Dynamics for Network Formation Games

  • Authors:
  • Esteban Arcaute;Ramesh Johari;Shie Mannor

  • Affiliations:
  • Institute for Computational and Mathematical Engineering, Stanford University,;Department of Management Science and Engineering, Stanford University,;Department of Electrical and Computer Engineering, McGill University,

  • Venue:
  • WINE '08 Proceedings of the 4th International Workshop on Internet and Network Economics
  • Year:
  • 2008

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Abstract

Network formation games capture two conflicting objectives of self-interested nodes in a network. On one hand, such a node wishes to be able to reach all other nodes in the network; on the other hand, it wishes to minimize its cost of participation. We focus on myopic dynamics in a class of such games inspired by transportation and communication models. A key property of the dynamics we study is that they are local : nodes can only deviate to form links with others in a restricted neighborhood. Despite this locality, we find that our dynamics converge to efficient or nearly efficient outcomes in a range of settings of interest.