Realizing efficient outcomes in cost spanning problems

Abstract

We propose a simple non-cooperative mechanism of network formation in cost spanning tree problems. The only subgame equilibrium payoff is efficient. Moreover, we extend the result to the case of budget restrictions. The equilibrium payoff can them be easily adapted to the framework of Steiner trees.efficiency, cost spanning tree problem, cost allocation, network formation, subgame perfect equilibrium, budget restrictions, Steiner trees