The Impact of Cooperation in Bilateral Network Creation

Many real-world networks, like the Internet or social networks, are not the result of central design but instead the outcome of the interaction of local agents that selfishly optimize their individual utility. The well-known Network Creation Game by Fabrikant, Luthra, Maneva, Papadimitriou, and Shenker [23] models this. There, agents corresponding to network nodes buy incident edges towards other agents for a price of alpha > 0 and simultaneously try to minimize their buying cost and their total hop distance. Since in many real-world networks, e.g., social networks, consent from both sides is required to establish and maintain a connection, Corbo and Parkes [14] proposed a bilateral version of the Network Creation Game, in which mutual consent and payment are required in order to create edges. It is known that this cooperative version has a significantly higher Price of Anarchy compared to the unilateral version. On the first glance this is counter-intuitive, since cooperation should help to avoid socially bad states. However, in the bilateral version only a very restrictive form of cooperation is considered. We investigate this trade-off between the amount of cooperation and the Price of Anarchy by analyzing the bilateral version with respect to various degrees of cooperation among the agents. With this, we provide insights into what kind of cooperation is needed to ensure that socially good networks are created. As a first step in this direction, we focus on tree networks and present a collection of asymptotically tight bounds on the Price of Anarchy that precisely map the impact of cooperation. Most strikingly, we find that weak forms of cooperation already yield a significantly improved Price of Anarchy. In particular, the cooperation of coalitions of size 3 is enough to achieve constant bounds. Moreover, for general networks we show that enhanced cooperation yields close to optimal networks for a wide range of edge prices. Along the way, we disprove an old conjecture by Corbo and Parkes [14].