Network games under strategic complementarities

Mohamed Moez Belhaj (1, 2) , Yann Bramoullé (2) , Frédéric Deroïan (2)

1 IEMN - Institut d’Électronique, de Microélectronique et de Nanotechnologie - UMR 8520
2 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille

We study network games under strategic complementarities. Agents are embedded in a fixed network. They choose a positive, continuous action and interact with their network neighbors. Interactions are positive and actions are bounded from above. We first derive new sufficient conditions for uniqueness, covering all concave as well as some non-concave best responses. We then study the relationship between position and action and identify situations where a more central agent always plays a higher action in equilibrium. We finally analyze comparative statics. We show that a shock may not propagate throughout the entire network and uncover a general pattern of decreasing interdependence.

Keywords: Centrality; Interdependence; Network games; Strategic complementarities; Uniqueness

Domains: Humanities and Social Sciences; Humanities and Social Sciences; Economics and Finance

Mohamed Moez Belhaj, Yann Bramoullé, Frédéric Deroïan. Network games under strategic complementarities. Games and Economic Behavior, 2014, 88 (C), pp.310--319. ⟨10.1016/j.geb.2014.10.009⟩. ⟨hal-01474250⟩