Efficient networks in games with local complementarities

Mohamed Belhaj (1) , Sebastian Bervoets (1) , Frédéric Deroïan (1)

1 AMSE - Aix-Marseille Sciences Economiques

We address the problem of a planner looking for the efficient network when agents play a network game with local complementarities and links are costly. We show that for general network cost functions, efficient networks belong to the class of Nested-Split Graphs. Next, we refine our results and find that, depending on the specification of the network cost function, complete networks, core-periphery networks, dominant group architectures, quasi-star and quasi-complete networks can be efficient.

Mots clés: nested split graphs; network games; strategic complementarity

Domaines: Sciences de l'Homme et Société; Economies et finances

Mohamed Belhaj, Sebastian Bervoets, Frédéric Deroïan. Efficient networks in games with local complementarities. Theoretical Economics, 2016, 11 (1), pp.357--380. ⟨10.3982/TE1742⟩. ⟨hal-01446213⟩