Research Seminar by Mariya Teteryatnikova (University of Vienna)
Speaker: Mariya Teteryatnikova (University of Vienna)
Theme: "Stability of Networks with Continuous Stream of Payoffs: A Theory and Experiment"

Abstract: We propose a new notion of farsighted pairwise stability for dynamic network formation which includes two notable features: cautiousness and consideration of intermediate payoffs. This differs from existing concepts which require a certain optimism on the part of the players in any environment without full communication and commitment, and which typically consider either only immediate or final payoffs. In a laboratory experiment we find some support for existing concepts, however our's is the only one that identifies precisely the set of empirically stable networks.