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Equilibrium characterization of networks under conflicting preferences

Author

Listed:
  • Hernández, Penélope
  • Martínez-Cánovas, Guillem
  • Muñoz-Herrera, Manuel
  • Sánchez, Angel

Abstract

In this work we characterize equilibrium introduced in configurations for networks with conflicting preferences. We use the model Hernández et al. (2013) to study the effect of three main factors: the strength of individual preferences, the level of integration in the network, and the intensity of conflict in the population. Our aim is to understand how likely is it that social outcomes are either those in which preferences dominate choices or those in which some individuals sacrifice their preferences to achieve consensus with others. Our results show that, the stronger individual preferences, the harder to achieve consensus in choices. However, in cases where the payoff ratio is less extreme, full coordination (consensus) is always an equilibrium. Finally, if the level of conflict is low, individual preferences become less relevant and all players choosing what they prefer is not an equilibrium anymore.

Suggested Citation

  • Hernández, Penélope & Martínez-Cánovas, Guillem & Muñoz-Herrera, Manuel & Sánchez, Angel, 2017. "Equilibrium characterization of networks under conflicting preferences," Economics Letters, Elsevier, vol. 155(C), pages 154-156.
    • Handle: RePEc:eee:ecolet:v:155:y:2017:i:c:p:154-156
    DOI: 10.1016/j.econlet.2016.12.004
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    References listed on IDEAS

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    1. Van Zandt, Timothy & Vives, Xavier, 2007. "Monotone equilibria in Bayesian games of strategic complementarities," Journal of Economic Theory, Elsevier, vol. 134(1), pages 339-360, May.
    2. Andrea Galeotti & Sanjeev Goyal & Matthew O. Jackson & Fernando Vega-Redondo & Leeat Yariv, 2010. "Network Games," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 218-244.
    3. Giulio Cimini & Claudio Castellano & Angel Sánchez, 2015. "Dynamics to Equilibrium in Network Games: Individual Behavior and Global Response," PLOS ONE, Public Library of Science, vol. 10(3), pages 1-15, March.
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    More about this item

    Keywords

    Coordination games; Strategic complementarities; Consensus; Networks;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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