Cooperation in two-stage games on undirected networks

Abstract

In the paper, cooperative two-stage network games are studied. At the first stage of the game, players form a network, while at the second stage players choose their behaviors according to the network realized at the first stage. As a cooperative solution concept in the game, the core is considered. It is proved that some imputations from the core are time inconsistent, whereas one can design for them a time-consistent imputation distribution procedure. Moreover, the strong time consistency problem is also investigated.