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on Network Economics |
| By: | Pascal Billand (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Christophe Bravard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Sudipta Sarangi (Department of Economics, Louisiana State University - Department of Economics, Louisiana State University) |
| Abstract: | In this paper, we pursue the work of H. Haller and al. (2005, [10]) and examine the existence of equilibrium networks, called Nash networks, in the noncooperative two-way flow model (Bala and Goyal, 2000, [1]) with partner heterogeneous agents. We show through an example that Nash networks do not always exist in such a context. We then restrict the payoff function, in order to find conditions under which Nash networks always exist. We give two properties : increasing differences and convexity in the first argument of the payoff function, that ensure the existence of Nash networks. It is worth noting that linear payoff functions satisfy the previous properties. |
| Keywords: | Nash networks; two-way flow models; partner heterogeneity |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00574277&r=net |
| By: | Virginie Masson (School of Economics, University of Adelaide) |
| Abstract: | We consider a finite population of agents who exchange information and are paired every period to play a game with tension between risk dominance and Pareto efficiency. Agents sample past plays and corresponding payoffs from their information neighborhood, and choose one of two possible actions using either best response or imitation. Information exchanges and possible matchings each constitutes a network. We first provide a complete description of the medium run outcomes and show that in the medium run only information matters. We then identify the conditions whereby either the risk dominant or the Pareto efficient convention is stochastically stable, and show how efficiency in the long run depends on the matching network. |
| Keywords: | Contagion, networks, coordination games, best response, imitation |
| JEL: | C73 D85 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2011-13&r=net |
| By: | Pascal Billand (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Christophe Bravard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Sudipta Sarangi (Department of Economics, Louisiana State University - Department of Economics, Louisiana State University) |
| Abstract: | We provide existence results in a game with local spillovers where the payoff function satisfies both convexity and the strategic substitutes property. We show that there always exists a stable pairwise network in this game, and provide a condition which ensures the existence of pairwise equilibrium networks. Moreover, our existence proof allows us to characterize a pairwise equilibrium of these networks. |
| Keywords: | networks; existence; spillovers |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00574265&r=net |
| By: | Pascal Billand (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Christophe Bravard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Sudipta Sarangi (Department of Economics, Louisiana State University - Department of Economics, Louisiana State University) |
| Abstract: | This paper introduces a partner heterogeneity assumption in the one-way flow model of Bala and Goyal (2000, [1]). Our goal consists in the characterization of strict Nash networks with regard to the set of resources obtained by players. We use the notion of condensation network which allows us to divide the population in sets of players who obtain the same resources and we order these sets according to the resources obtained. Accordingly, we can examine the relationship between heterogeneity and asymmetries in networks. We establish that the nature of heterogeneity plays a crucial role on asymmetries observed in equilibrium networks. |
| Keywords: | Nash networks; one-way flow model; condensation networks; chain; inf-semi-lattice |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00574256&r=net |