LOCAL INTERACTION, ALTRUISM AND THE EVOLUTION OF NETWORKS
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We consider evolving networks on which players interact locally. In an evolutionary environment, players can increase their fitness either by changing their behavior or by changing their neighbors. We propose a static solution concept, what we call Stable Network Configuration (SNC). Roughly speaking, it requires that no player in the population distribution will change his type by imitating his best-performing neighbor, nor change his neighbor by rewiring his links. We characterize the necessary and sufficient conditions for the symmetric SNC in a network formation situation associated with the Prisoner's Dilemma game. Unlike the result by Eshel et al. (1998) that was obtained in a fixed circular network, all altruists and all egoists fare equally well and all altruists have links with some or all egoists in the symmetric SNC.
Abstract
We consider evolving networks on which players interact locally. In an evolutionary environment, players can increase their fitness either by changing their behavior or by changing their neighbors. We propose a static solution concept, what we call Stable Network Configuration (SNC). Roughly speaking, it requires that no player in the population distribution will change his type by imitating his best-performing neighbor, nor change his neighbor by rewiring his links. We characterize the necessary and sufficient conditions for the symmetric SNC in a network formation situation associated with the Prisoner's Dilemma game. Unlike the result by Eshel et al. (1998) that was obtained in a fixed circular network, all altruists and all egoists fare equally well and all altruists have links with some or all egoists in the symmetric SNC.
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