Expected Fair Allocation in Farsighted Network Formation

Noemí Navarro
Social Choice and Welfare 43 (2): 287-308

I consider situations in which a group of players extracts a value if they organise themselves in different network structures, and I define a solution concept to describe the decentralised decision that determines the network formation process and the allocation of the value. I demonstrate that there is a solution concept satisfying discounted expected versions of pairwise stability (Jackson and Wolinsky, 1996) and fairness (Myerson, 1977a) jointly with the requirement that the allocation rule be component efficient if the players' discount factor is sufficiently low.

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