I: A Selected Review of the Literature -- The Controversy over Pigou’s Increasing Cost Theorem -- Between Controversies -- The Controversy over Coase’s Neutrality Theorem: the Case for Coase -- The Pigovian Revival: the Case against Coase -- Recent Developments -- Summary and Prelude -- II:...

We examine the formation of networks among a set of players whose payoffs depend on the structure of the network. We focus on games where players may bargain by promising or demanding transfer payments when forming links. We examine several variations of the transfer/bargaining aspect of link...