Forming Efficient Networks

  • Authors: David Pérez-Castrillo and David Wettstein
  • BSE Working Paper: 123 | February 2026
  • JEL codes: C71, C72
  • Networks, February 2026
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Abstract

In this paper, we suggest a simple sequential mechanism whose subgame perfect equilibria give rise to efficient networks. Moreover, the payoffs received by the agents coincide with their Shapley value in an appropriately defined cooperative game.

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