Network design is a fundamental problem for which it is important to understand the effects of strategic behavior. Given a collection of self-interested agents who want to form a network connecting certain endpoints, the set of stable solutions - the Nash equilibria - may look quite different from the centrally enforced optimum. The paper studies the quality of the best Nash equilibrium, and refers to the ratio of its cost to the optimum network cost as the price of stability. The best Nash equilibrium solution has a natural meaning of stability in this context - it is the optimal solution that can be pro-posed from which no user will Defect".
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