Solution concepts in social environments use either a direct or indirect dominance relationship, depending on whether it is assumed that agents are myopic or farsighted. Direct dominance implies indirect dominance, but not the reverse. Hence, the predicted outcomes when assuming myopic (direct)...

The paper examines the formation of free trade agreements as a network formation game. We consider an n-country model in which international trade occurs between economies with imperfectly competitive product markets. In each country, the labor market is either unionized or non-unionized. We...

A set of coalition structures <em>P</em> is farsightedly stable (i) if all possible deviations from any coalition structure p belonging to <em>P</em> to a coalition structure outside <em>P</em> are deterred by the threat of ending worse off or equally well off, (ii) if there exists a farsighted improvingpath from any...

We study the stability of social and economic networks when players are farsighted. We first provide an algorithm that characterizes the unique pairwise and groupwise farsightedly stable set of networks under the componentwise egalitarian allocation rule. We then show that this set coincides...

We develop a theoretical framework that allows us to study which bilateral links and coalition structures are going to emerge at equilibrium. We define the notion of coalitional network to represent a network and a coalition structure, where the network specifies the nature of the relationship...

We consider situations where players are part of a network and belong to coalitions in a given coalition structure. We propose the concept of contractual stability to predict the networks that are going to emerge at equilibrium when the consent of coalition partners is needed for adding or...

We analyze the formation of bilateral R&D collaborations in an oligopoly when each firm benefits from the research done by other firms it is connected to. In contrast to myopic stability, farsighted stability leads to R&D networks consisting of two minimally connected components, with the...

What is the effect of product market integration on the market equilibrium in the presence of international network externalities in consumption? To address this question, we set up a spatial two-country model and we find that the economic forces at work may have an ambiguous effect on prices.