Bargaining in Networks - Why Our Game in Class Didn't Work Out

Remember how Node 2 in class didn't take 1 dollar and instead split it $0.75/$0.25 with Node 1?



This was cause Node 2 was not a "high-mach," as this blog post argues. With our game, we were assuming that people would act purely according to their self-interest without regard for morality/fairness, but this actually wasn't true. Node 2 clearly didn't want to completely exploit her neighbors; she only slightly exploited Nodes 1 and 3.

Basically, there are high-machs and low-machs.

High-machs are more likely to accept unfair deals, and low-machs want to be honest and are good. Low-machs are the ones that mess up many social network models that deal with bargaining and exchange.