Strategic Formation of Credit Networks

Strategic Formation of Credit Networks (2012)

by Pranav Dandekar , Ashish Goel , Bryce Wiedenbeck , Michael P. Wellman

Datum	Value	Source
TITLE	Strategic Formation of Credit Networks	SVM HeaderParse 0.2
AUTHOR NAME	Pranav Dandekar	SVM HeaderParse 0.2
AUTHOR AFFIL	Stanford University	SVM HeaderParse 0.2
AUTHOR NAME	Ashish Goel	SVM HeaderParse 0.2
AUTHOR AFFIL	Stanford University	SVM HeaderParse 0.2
AUTHOR NAME	Bryce Wiedenbeck	SVM HeaderParse 0.2
AUTHOR AFFIL	University of Michigan	SVM HeaderParse 0.2
AUTHOR NAME	Michael P. Wellman	SVM HeaderParse 0.2
AUTHOR AFFIL	University of Michigan	SVM HeaderParse 0.2
ABSTRACT	Credit networks are an abstraction for modeling trust between agents in a network. Agents who do not directly trust each other can transact through exchange of IOUs (obligations) along a chain of trust in the network. Credit networks are robust to intrusion, can enable transactions between strangers in exchange economies, and have the liquidity to support a high rate of transactions. We study the formation of such networks when agents strategically decide how much credit to extend each other. When each agent trusts a fixed set of other agents, and transacts directly only with those it trusts, the formation game is a potential game and all Nash equilibria are social optima. Moreover, the Nash equilibria of this game are equivalent in a very strong sense: the sequences of transactions that can be supported from each equilibrium credit network are identical. When we allow transactions over longer paths, the game may not	SVM HeaderParse 0.2
YEAR	2012	SVM HeaderParse 0.2
CITATIONS	18 found	ParsCit 1.0