Abstract
Situations that require individuals to mutually cooperate are often analysed as coordination games. This paper proposes a model of cooperative network formation where the network is formed through the process of the coordination game being played between multiple agents. Additionally, network effects are modeled in by the fact that the benefit to any agent from a mutually cooperative link is enhanced, over a base value, by a factor of her trustworthiness or reputation as observed by her partner in that link. Within this framework, evolution of cooperative networks is analysed in the presence of altruistic agents, through repeated interaction between myopically best responding agents in a fi nite population. Properties of networks that manifest as Nash equilibrium are also analysed.
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