MULTIPLE CONNECTIVITY APPROACH TO NETWORK FORMATION GAMES

Date

2023-12-11

Author

Çam, Can Deniz

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The analyses of network structures, formations and stability characteristics are gaining importance and attracting increasing attention. This thesis establishes a specific network formation game and suggests a network stability concept. The game is among firms forming networks to reduce their costs and, hence, increase their payoffs. The multiple connectivity approach computes how individuals may alter the combinations of their connections to reach optimal payoff levels by solving a mixed integer optimization problem. Finding the optimal combinations of multiple discrete connection choices creates a complex problem. This problem is solved by implementing an interpolation method that is particular to the problem and modifying the branch and bound algorithm. The ability of the proposed model to describe network formation is investigated by simulating different network structures emanating from the different model parameters. These simulations hint at the existence of multiple connectivity stability for networks, even in the cases where pairwise stability can not be provided within the context of the established model of the thesis. We take this as the indication of a new stability concept: multiple connectivity stability for networks.

Subject Keywords

Network Formation, Network Stability, Mixed Integer Nonlinear Optimization

URI

https://hdl.handle.net/11511/107764

Collections

Graduate School of Applied Mathematics, Thesis