Local Two-Stage Myopic Dynamics for Network Formation Games

Network formation games capture two conflicting objectives of self-interested nodes in a network. On one hand, such a node wishes to be able to reach all other nodes in the network; on the other hand, it wishes to minimize its cost of participation. We focus on myopic dynamics in a class of such games inspired by transportation and communication models. A key property of the dynamics we study is that they are local: nodes can only deviate to form links with others in a restricted neighborhood. Despite this locality, we find that our dynamics converge to efficient or nearly efficient outcomes in a range of settings of interest.