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This dissertation focuses on studying various network formation games in Economics. We explore a different model in each chapter to capture various aspects of networks. Chapter 1provides an overview of this dissertation. Chapter 2 studies the possible Nash equilibrium configurations in a model of signed network formation as proposed by Hiller (2017). We specify the Nash equilibria in the case of heterogeneous agents. We find 3 possible Nash equilibrium configurations: Utopia network, positive assortative matching, and disassortative matching. We derive the specific conditions under which they arise in a Nash equilibrium. In Chapter 3, we study a generalized model of signed network formation game where the players can choose not only positive and negative links but also neutral links. We check whether the results of the signed network formation model in the literature still hold in our generalized framework using the notion of pairwise Nash equilibrium. Chapter 4 studies inequality in a weighted network formation model using the notion of Nash equilibrium. As a factor of inequality, there are two types of players: Rich players and poor players. We show that both rich and poor players designate other rich players as their best friends. As a result, We present that nested split graphs are drawn from survey data because researchers tend to ask respondents to list only a few friends. / Doctor of Philosophy / This dissertation focuses on studying various network formation games in Economics. We explore a different model in each chapter to capture various aspects of networks. Chapter 1 provides an overview of this dissertation. Chapter 2 studies the possible singed network configurations in equilibrium. In the signed network, players can choose a positive (+) relationship or a negative (-) relationship toward each other player. We study the case that the players are heterogeneous. We find 3 possible categories of networks in equilibrium: Utopia network, positive assortative matching, and disassortative matching. We derive the specific conditions under which they arise in equilibrium. In Chapter 3, we study a generalized model of signed network formation game where the players can choose not only positive and negative links but also neutral links. We check whether the results of the signed network formation model in the literature still hold in our generalized framework. Chapter 4 studies inequality in a weighted network formation model using the notion of Nash equilibrium. In this weighted network model, each player can choose the level of relationship. As a factor of inequality, there are two types of players: rich players and poor players. We show that both rich and poor players choose other rich players as their best friends. As a result, we present that nested split graphs are drawn from survey data because these social network data are censored due to the limit of the number of responses.

Substations are joints in the power system that represent nodes that are vital to stable and reliable operation of the power system. They contrast the rest of the power system in that they are a dense combination of critical components causing all of them to be simultaneously vulnerable to one isolated incident: weather, attack, or other common failure modes. Undoubtedly, the loss of these vital links will have a severe impact to the to the power grid to varying degrees. This work creates a cascading model based on protection system misoperations to estimate system risk from loss-of-substation events in order to assess each substation's criticality. A continuation power flow method is utilized for estimating voltage collapse during cascades. Transient stability is included through the use of a supervised machine learning algorithm called random forests. These forests allow for fast, robust and accurate prediction of transient stability during loss-of-substation initiated cascades. Substation risk indices are incorporated into a preventative optimal power flow (OPF) to reduce the risk of critical substations. This risk-based dispatch represents an easily scalable, robust algorithm for reducing risk associated with substation losses. This new dispatch allows operators to operate at a higher cost operating point for short periods in which substations may likely be lost, such as large weather events, likely attacks, etc. and significantly reduce system risk associated with those losses. System risk is then studied considering the interaction of a power grid utility trying to protect their critical substations under a constrained budget and a potential attacker with insider information on critical substations. This is studied under a zero-sum game theoretic framework in which the utility is trying to confuse the attacker. A model is then developed to analyze how a utility may create a robust strategy of protection that cannot be heavily exploited while taking advantage of any mistakes potential attackers may make. / Ph. D.

Cyber attacks against companies are becoming more common as technology advances and digitalization is increasing exponentially. All Swedish insurance companies that sell cyber insurance encounter the same problem, there is not enough data to do good actuarial work. In order for the pricing procedure to improve and general knowledge of cyber insurance to increase, it has been proposed that insurance companies should share their data with each other. The goal of the thesis is to do mathematical calculations to explore data quality consequences of such a sharing regime. This thesis is based on some important assumptions and three scenarios. The most important assumptions are that there are two insurance companies forced to share all their data with each other and that they can reduce the uncertainty about their own product by investing in better data quality. In the first scenario, we assume a game between two players where they can choose how much to invest in reducing the uncertainty. In the second scenario, we assume that there is not a game, but the two insurance companies are forced to equal investments and thus have the same knowledge of their products. In the third scenario, we assume that the players are risk averse, that is, they are not willing to take high risk. The results will show how much, if any, the insurance companies should invest in the different scenarios to maximize their profits (if risk neutral) or utility (if risk averse). The results of this thesis show that in the first and second scenario, the optimal profit is reached when the insurance companies do not invest anything. In the third scenario though, the optimal investment is greater than zero, given that the companies are enough risk averse.

In this thesis we consider constrained systems of equations. The focus is on local Newton-type methods for the solution of constrained systems which converge locally quadratically under mild assumptions implying neither local uniqueness of solutions nor differentiability of the equation function at solutions. The first aim of this thesis is to improve existing local convergence results of the constrained Levenberg-Marquardt method. To this end, we describe a general Newton-type algorithm. Then we prove local quadratic convergence of this general algorithm under the same four assumptions which were recently used for the local convergence analysis of the LP-Newton method. Afterwards, we show that, besides the LP-Newton method, the constrained Levenberg-Marquardt method can be regarded as a special realization of the general Newton-type algorithm and therefore enjoys the same local convergence properties. Thus, local quadratic convergence of a nonsmooth constrained Levenberg-Marquardt method is proved without requiring conditions implying the local uniqueness of solutions. As already mentioned, we use four assumptions for the local convergence analysis of the general Newton-type algorithm. The second aim of this thesis is a detailed discussion of these convergence assumptions for the case that the equation function of the constrained system is piecewise continuously differentiable. Some of the convergence assumptions seem quite technical and difficult to check. Therefore, we look for sufficient conditions which are still mild but which seem to be more familiar. We will particularly prove that the whole set of the convergence assumptions holds if some set of local error bound conditions is satisfied and in addition the feasible set of the constrained system excludes those zeros of the selection functions which are not zeros of the equation function itself, at least in a sufficiently small neighborhood of some fixed solution. We apply our results to constrained systems arising from complementarity systems, i.e., systems of equations and inequalities which contain complementarity constraints. Our new conditions are discussed for a suitable reformulation of the complementarity system as constrained system of equations by means of the minimum function. In particular, it will turn out that the whole set of the convergence assumptions is actually implied by some set of local error bound conditions. In addition, we provide a new constant rank condition implying the whole set of the convergence assumptions. Particularly, we provide adapted formulations of our new conditions for special classes of complementarity systems. We consider Karush-Kuhn-Tucker (KKT) systems arising from optimization problems, variational inequalities, or generalized Nash equilibrium problems (GNEPs) and Fritz-John (FJ) systems arising from GNEPs. Thus, we obtain for each problem class conditions which guarantee local quadratic convergence of the general Newton-type algorithm and its special realizations to a solution of the particular problem. Moreover, we prove for FJ systems of GNEPs that generically some full row rank condition is satisfied at any solution of the FJ system of a GNEP. The latter condition implies the whole set of the convergence assumptions if the functions which characterize the GNEP are sufficiently smooth. Finally, we describe an idea for a possible globalization of our Newton-type methods, at least for the case that the constrained system arises from a certain smooth reformulation of the KKT system of a GNEP. More precisely, a hybrid method is presented whose local part is the LP-Newton method. The hybrid method turns out to be, under appropriate conditions, both globally and locally quadratically convergent.

This thesis aims to contribute to a fundamental objective of Network Economics: to provide based incentives explanations of real social network topologies. By using game theoretical tools, the three papers of this thesis analyze how real social networks can arise from the strategic interaction of self-interested individuals.In the first paper, we discuss the influence of imperfect information on the process of social network formation and, specifically, on the possibilities of observing racially segregated societies when agents' preferences are not racially biased. The second work attempts to complete the Network Economics' explanation of the puzzle regarding how agents can benefit from structural holes over a long time period. The third paper presents a model that focuses on the mechanisms underlying the formation of scientific collaboration networks. We show how researchers' heterogeneity and limited processing capability explain the basic characteristics of these networks. / Aquesta tesi aspira a contribuir a un objectiu fonamental de l'Economia de Xarxes: oferir explicacions basades en els incentius de les topologies que adopten les xarxes socials. Usant les eines de la Teoria de Jocs, els tres articles de la tesi analitzen com les xarxes socials que observem a la realitat poden esser fruit de la interacció entre individus que responen als seus propis interessos.En primer lloc, estudiem la influència de la informació imperfecte en la formació de xarxes socials i, específicament, en les possibilitats de tenir societats racialment segregades quan les preferències dels agents no estan racialment esbiaixades. El segon treball, intenta completar l'explicació que l'Economia de Xarxes dóna a l'interrogant referent als forats estructurals i a la gent que s'en beneficia de manera continuada. El darrer capítol, se centra en els mecanismes que expliquen la formació de xarxes de col·laboració científica. Es mostra com l'heterogeneïtat i la limitada capacitat de processament dels investigadors expliquen les caractarístiques bàsiques d'aquestes xarxes.

Made available in DSpace on 2009-11-18T18:56:20Z (GMT). No. of bitstreams: 0 Previous issue date: 2004 / The present paper has the proposal to assess the management process of complex negotiation of the 5th OMC that took place at Cancun from September 10th until the 14th , 2003. This thesis points out the problems and questions that resulted on the collapse of a possible agreement, it also suggest proposal to solve these issues. The future of OMC is uncertain and traumatic changes suffered by many countries that live under the rules of OMC shows that something at OMC will have to change, principally on the process of complex negotiation, such as the integrity of the organization to avoid having to compromise and being damaged. There were searches for answers on the analysis and assessment of the negotiation process, studying and researching the bargain positional concepts, giving full details on the negotiation process based on principIes, exploring profusely the state of art for the management of difficult conversation. This thesis also tackles the sources of conflicts and the building of coalitions such as the G20, showing the difficulty existing in the resolution of public disputes and in the use of instruments to break the impasses. We also defined theoretical instrumental, which allowed the diagnostic ofthe actual situation at OMe. It was recommend to explore the valuation of conflicts, based on justice and equitant, the best form of negotiation by principIes, of management demanding public, on the multi stakeholder dialogue and the importance of informal parallel conversation. The environment of complexity and the extensive vision that it provides to adjust the functioning of autopoietics systems. / Pretende-se no presente trabalho avaliar a gestão do processo de negociação complexa da 5ª Conferência Ministerial da Organização Mundial do Comércio em Cancún, ocorrida entre os dias 10 e 14 de setembro de 2003, no México, apontando os problemas e questões que resultaram no colapso de um possível acordo. O futuro da OMC é incerto e mudanças traumáticas sofridas por muitos países que vivem sob as regras da OMC indicam que alguma coisa na OMC terá que mudar, principalmente nos processos de negociação complexa, de forma que a integridade da organização não seja comprometida. Buscou-se respostas na análise e avaliação da gestão do processo de negociação, estudando e pesquisando os conceitos de barganha posicional, detalhando o processo de negociação baseado em princípios, explorando em profundidade o estado da arte para gestão de conversas difíceis. Dissecando a questão dos conflitos e das coalizões, mostrando a dificuldade existente na resolução de disputas públicas e no uso de instrumentos para quebrar o impasse nas negociações buscou-se estabelecer o instrumental teórico que possibilitasse aprofundar o diagnóstico da situação atual na OMC. Como recomendação explorou-se a avaliação de conflitos, com base na eficiência - teoria dos jogos-, justiça e na eqüidade, a melhor forma de negociação baseada em princípios, de gestão de público demandante, no diálogo dos multistakeholders, a importância das conversas informais paralelas, o ambiente da complexidade e a visão ampla que proporciona o enfoque do funcionamento de sistemas decisórios autopoiéticos.

Cette thèse est une contribution à la théorie économique sur trois aspects: la dynamique de prix dans les marchés financiers avec asymétrie d’information, la mise à jour des croyances et les raffinements d'équilibre dans les jeux de signaux, et l'introduction de l'ambiguïté dans la théorie du prix limite. Dans le chapitre 2, nous formalisons un jeu d'échange à somme nulle entre un secteur mieux informé et un autre qui l'est moins, pour déterminer de façon endogène, la dynamique du prix sous-jacent. Dans ce modèle, joueur 1 est informé de la conjoncture (L) mais est incertain de la croyance de joueur 2, car ce dernier est seulement informé à travers un message (M) qui est lié à cette conjoncture. Si L et M sont indépendants, alors le processus de prix sera une Martingale Continue à Variation Maximale (CMMV) et joueur 1 peut disposer de cet avantage informationnel. Par contre, si L et M ne sont pas indépendants, joueur 1 ne révèlera pas son information pendant le processus, et il ne bénéficiera donc pas de son avantage en matière d'information. Dans le chapitre 3, je propose une définition de l'équilibre de Test d'hypothèse (HTE) pour des jeux de signaux généraux, avec des joueurs non-Bayésiens qui sont soumis à une règle de mise à jour selon le modèle de vérification d'hypothèse caractérisé par Ortoleva (2012). Un HTE peut être différent d'un équilibre séquentiel de Nash en raison d'une incohérence dynamique. Par contre, dans le cas où joueur 2 traite seulement un message à probabilité nulle comme nouvelle inespérée, un HTE est un raffinement d'équilibre séquentiel de Nash et survit au critère intuitif dans les jeux de signaux généraux mais pas inversement. Nous fournissons un théorème d'existence qui couvre une vaste classe de jeux de signaux qui sont souvent étudiés en économie. Dans le chapitre 4, j'introduis l’ambiguïté dans un modèle d'organisation industrielle classique, dans lequel l'entreprise déjà établie est soit informée de la vraie nature de la demande agrégée, soit soumise à une incertitude mesurable classique sur la conjoncture, tandis qu'un éventuel nouvel arrivant fait face à une incertitude a la Knight (ambiguïté) concernant cette conjoncture. Je caractérise les conditions sou lesquelles le prix limite émerge en équilibre, et par conséquent l'ambigüité diminue la probabilité d'entrée. L'analyse du bien-être montre que le prix limite est plus nocif dans un marché où la demande escomptée est plus élevée que dans un autre où celle-ci est moindre. / This thesis contributes to the economic theory literature in three aspects: price dynamics in financial markets with asymmetric information belief updating and equilibrium refinements in signaling games, and introducing ambiguity in limit pricing theory. In chapter 2, we formulate a zero-sum trading game between a better informed sector and a less 1nformed sector to endogenously determine the underlying price dynamics. In this model, player 1 is informed of the state (L) but is uncertain about player 2's belief about the state, because player 2 is informed through some message (M) related to the state. If L and M are independent, then the price proces s will be a Continuous Martingale of Maximal Variation (CMMV), and player 1 can benefit from his informational advantage. However, if L and M are not independent, player 1 will not reveal his information during the trading process, therefore, he does not benefit from his informational advantage. In chapter 3, I propose a definition of Hypothesis Testing Equilibrium (HTE) for general signaling games with non-Bayesian players nested, by an updating rule according to the Hypothesis Testing model characterized by Ortoleva (2012). An HTE may differ from a sequential Nash equilibrium because of dynamic inconsistency. However, in the case in which player 2 only treats a zero-probability message as an unexpected news, an HTE is a refinement of sequential Nash equilibrium and survives the intuitive Critenon in general signaling games but not vice versa. We provide an existence theorem covering a broad class of signaling games often studied in economics. In chapter 4, I introduce ambiguity in a standard industry organization model, in which the established firm is either informed of the true state of aggregate demand or is under classical measurable uncertainty about the state, while the potential entrant is under Knightian uncertainty (ambiguity) about the state. I characterize the conditions under which limit pricing emerges in equilibria, and thus ambiguity decreases the probability of entry. Welfare analysis shows that limit pricing is more harmful in a market with higher expected demand than in a market with lower expected demand.