The power allocation game on a network: a paradox

The well-known Braess paradox in congestion games states that adding an additional road to a transportation network may increase the total travel time, and consequently decrease the overall efficiency. This paper presents a paradox in a similar spirit and involves a distributed resource allocation game on networks, namely the power allocation game between countries developed in Li and Morse ( 2017 ). The paradox is that by having additional friends may actually decrease a country ʼ s total welfare in equilibrium. Conditions for this paradox to occur as well as the price of anarchy results are also derived.