1. Consider the one-sided model with linear payoffs. Fix n = 10. Derive the conditions on decay and cost of link parameters under which a single hub with 9 spokes and a hub with windmill network with equal size three petals is a Nash equilibrium.

1. Consider the one-sided model with linear payoffs. Fix n = 10. Derive the conditions on decay and cost of link parameters under which a single hub with 9 spokes and a hub with windmill network with equal size three petals is a Nash equilibrium.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Consider the one-sided model with linear payoffs. Fix n =
10. Derive the conditions
on decay and cost of link parameters under which a single hub with 9 spokes and a
hub with windmill network with equal size three petals is a Nash equilibrium.
2. Consider the one-sided model with decay. Show that a Nash equilibrium network is
either connected or empty.

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