|
on Network Economics |
|
Issue of 2018‒02‒12
three papers chosen by Pedro CL Souza Pontifícia Universidade Católica do Rio de Janeiro |
| By: | Goyal, S. |
| Abstract: | This chapter shows that networks can have large and differentiated effects on behavior and then argues that social and economic pressures facilitate the formation of heterogenous networks. Thus networks can play an important role in understanding the wide diversity in human behaviour and in economic outcomes. |
| Date: | 2018–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1812&r=net |
| By: | Demuynck, Thomas (universite libre de bruxelles); Herings, P. Jean-Jacques (General Economics 1 (Micro)); Saulle, Riccardo (General Economics 1 (Micro)); Seel, Christian (General Economics 1 (Micro)) |
| Abstract: | We introduce a new solution concept for models of coalition formation, called the myopic stable set (MSS). The MSS is defined for a general class of social environments and allows for an infinite state space. An MSS exists and, under minor continuity assumptions, it is also unique. The MSS generalizes and unifies various results from more specific applications. It coincides with the coalition structure core in coalition function form games when this set is non-empty; with the set of stable matchings in the Gale-Shapley matching model; with the set of Pareto optimal allocations in the Shapley-Scarf housing matching model; with the set of pairwise stable networks and closed cycles in models of network formation; with the set of pure strategy Nash equilibria in pseudo-potential games and finite supermodular games; and with the set of mixed strategy Nash equilibria in several classes of two-player games. |
| Keywords: | Social environments, group formation, stability, Nash equilibrium |
| JEL: | C70 C71 |
| Date: | 2018–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2018001&r=net |
| By: | Mohamed Belhaj (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Frédéric Deroïan (InSHS-CNRS and Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE) |
| Abstract: | We consider a network game with local complementarities. A policymaker, aiming at minimizing or maximizing aggregate effort, contracts with a single agent on the network to trade effort change against transfer. The policymaker has to find the best agent and the optimal contract to offer. Our study shows that for all utilities with linear best-responses, it only takes two statistics about the position of each agent on the network to identify the key player: the Bonacich centrality and a weighted measure of the number of closed walks originating from the agent. We also characterize key players under linear quadratic utilities for various contractual arrangements. |
| Keywords: | key player, Network, Linear Interaction, incentives, contract, limited budget |
| JEL: | C72 D85 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1804&r=net |