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Competitive contagion in networks

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  • Goyal, Sanjeev
  • Heidari, Hoda
  • Kearns, Michael

Abstract

We develop a game-theoretic framework for the study of competition between firms who have budgets to “seed” the initial adoption of their products by consumers located in a social network. We identify a general property of the adoption dynamics — namely, decreasing returns to local adoption — for which the inefficiency of resource use at equilibrium (the Price of Anarchy) is uniformly bounded above, across all networks. We also show that if this property is violated, even the Price of Stability can be unbounded, thus yielding sharp threshold behavior for a broad class of dynamics. We provide similar results for a new notion, the Budget Multiplier, that measures the extent to which the imbalances in player budgets can be amplified at equilibrium.

Suggested Citation

  • Goyal, Sanjeev & Heidari, Hoda & Kearns, Michael, 2019. "Competitive contagion in networks," Games and Economic Behavior, Elsevier, vol. 113(C), pages 58-79.
    • Handle: RePEc:eee:gamebe:v:113:y:2019:i:c:p:58-79
    DOI: 10.1016/j.geb.2014.09.002
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    Cited by:

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    2. Arthur Campbell & C. Matthew Leister & Yves Zenou, 2020. "Word‐of‐mouth communication and search," RAND Journal of Economics, RAND Corporation, vol. 51(3), pages 676-712, September.
    3. Markus Brede, 2019. "How Does Active Participation Affect Consensus: Adaptive Network Model of Opinion Dynamics and Influence Maximizing Rewiring," Complexity, Hindawi, vol. 2019, pages 1-16, June.
    4. Toomas Hinnosaar, 2019. "Price Setting on a Network," Papers 1904.06757, arXiv.org.
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    7. Tabasso, Nicole, 2019. "Diffusion of multiple information: On information resilience and the power of segregation," Games and Economic Behavior, Elsevier, vol. 118(C), pages 219-240.
    8. Jiao, Qian & Xu, Jin, 2020. "Competition for networked agents in the lottery Blotto game," Economics Letters, Elsevier, vol. 197(C).

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    More about this item

    Keywords

    Competition; Network multipliers; Tullock contests; Viral marketing;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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