Cautious farsighted stability in network formation games with streams of payoffs

We propose a new notion of farsighted pairwise stability for dynamic network for-mation which includes two notable features: consideration of intermediate payoffsand cautiousness. This differs from existing concepts which typically consider eitheronly immediate or final payoffs, and which often require that players are optimisticin any environment without full communication and commitment. For arbitrary (andpossibly heterogeneous) preferences over the process of network formation, a non-emptycautious path stableset of networks always exists. Furthermore, some generalrelationships exist between cautious path stability and other farsighted concepts.