Nash Equilibria and Competitions in Financial Networks-of-networks

An investigation on interactions among networks of networks, in a contest of achieving centrality and importance, leads researchers to combine network science and game theory. In the present study, their approach implies that networks are main players to create links.

This study describes the emergence of equilibrium among more than two dynamic networks which create connections with each other.

It is shown that weak networks in a collaborative process by creating strategic connections are able to overcome the strongest network. Counter-intuitively, regardless of the activities of the strongest network, a certain weaker network in the case of transition to a collaborative structure can transform to a dominant. This phenomenon shows the power of underdogs in the fate of networks-of-networks.

They clarify these concepts:

  • The tendency of networks as individual bodies in a rivalry or cooperation temporal process
  • Final stable enhancement of dominance

It is worth considering that the mainstream of the methodology is applying eigenvector centrality and … ( To be continued )

Ref:

Competition among networks highlights the power of the weak

Jaime Iranzo, Javier M. Buldú & Jacobo Aguirre

doi: 10.1038/ncomms13273

Abstract

The unpreventable connections between real networked systems have recently called for an examination of percolation, diffusion or synchronization phenomena in multilayer networks. Here we use network science and game theory to explore interactions in networks-of-networks and model these as a game for gaining importance. We propose a viewpoint where networks choose the connection strategies, in contrast with classical approaches where nodes are the active players. Specifically, we investigate how creating paths between networks leads to different Nash equilibria that determine their structural and dynamical properties. In a wide variety of cases, selecting adequate connections leads to a cooperative solution that allows weak networks to overcome the strongest opponent. Counterintuitively, each weak network can induce a global transition to such cooperative configuration regardless of the actions of the strongest network. This power of the weak reveals a critical dominance of the underdogs in the fate of networks-of-networks.

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