Targeting the key player: An incentive-based approach

Mohamed Belhaj (1) , Frédéric Deroïan (1)

1 AMSE - Aix-Marseille Sciences Economiques

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 the self-loop centrality. We also characterize key players under linear quadratic utilities for various contractual arrangements.

Domaines: Economies et finances; Économie et finance quantitative [q-fin]; Mathématiques [math]

Mohamed Belhaj, Frédéric Deroïan. Targeting the key player: An incentive-based approach. Journal of Mathematical Economics, 2018, 79, pp.57-64. ⟨10.1016/j.jmateco.2018.10.001⟩. ⟨hal-01981885⟩