Advanced Search
MyIDEAS: Login to save this paper or follow this series

Existence of Pure Strategies Nash Equilibria in Social Interaction Games with Dyadic Externalities

Contents:

Author Info

  • Le Breton, Michel
  • Weber, Shlomo
Registered author(s):

    Abstract

    In this note we introduce a general class of games where the payoff of every player are affected by her intrinsic taste for available strategic choices; intensity of her dyadic social interactions of with others in the peer group; and conformity effect. We show, that if the dyadic social influences are symmetric and the conformity effect is identical for all players, every game in our class admits a Nash equilibrium in pure strategies. Our proof relies on the fact that our game is potential (Rosenthal (1973), Monderer and Shapley (1996)). We also illustrate the universality of our result through a large spectrum of applications in economics, political science and sociology.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.cepr.org/pubs/dps/DP7279.asp
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7279.

    as in new window
    Length:
    Date of creation: Apr 2009
    Date of revision:
    Handle: RePEc:cpr:ceprdp:7279

    Contact details of provider:
    Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
    Phone: 44 - 20 - 7183 8801
    Fax: 44 - 20 - 7183 8820

    Order Information:
    Email:

    Related research

    Keywords: conformity effect; dyadic externalities; Nash equilibria; potential games; Social interactions;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Blume,L. & Durlauf,S., 2002. "Equilibrium concepts for social interaction models," Working papers, Wisconsin Madison - Social Systems 7, Wisconsin Madison - Social Systems.
    2. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
    3. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May.
    4. Suryapratim Banerjee & Hideo Konishi & Tayfun Sonmez, 1999. "Core in a Simple Coalition Formation Game," Boston College Working Papers in Economics 449, Boston College Department of Economics.
    5. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, Econometric Society, vol. 65(5), pages 1005-1028, September.
    6. Edward L. Glaeser & Bruce I. Sacerdote & Jose A. Scheinkman, 2002. "The Social Multiplier," Harvard Institute of Economic Research Working Papers 1968, Harvard - Institute of Economic Research.
    7. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
    8. Milchtaich, Igal, 1996. "Congestion Games with Player-Specific Payoff Functions," Games and Economic Behavior, Elsevier, vol. 13(1), pages 111-124, March.
    9. Galam, Serge, 1996. "Fragmentation versus stability in bimodal coalitions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 230(1), pages 174-188.
    10. Marcel Fafchamps & Flore Gubert, 2005. "The Formation of Risk Sharing Networks," Working Papers DT/2005/13, DIAL (Développement, Institutions et Mondialisation).
    11. Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1997. "Equilibria in a Model with Partial Rivalry," Journal of Economic Theory, Elsevier, vol. 72(1), pages 225-237, January.
    12. Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995. "Crime and Social Interactions," Harvard Institute of Economic Research Working Papers 1738, Harvard - Institute of Economic Research.
    13. Brock, William A & Durlauf, Steven N, 2001. "Discrete Choice with Social Interactions," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 68(2), pages 235-60, April.
    14. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
    15. Nikolai S. Kukushkin, 2004. "Congestion Games Revisited," Game Theory and Information, EconWPA 0412010, EconWPA, revised 02 Feb 2006.
    16. 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.
    17. Jeffrey E. Harris & Beatriz Lopez-Valcarcel, 2004. "Asymmetric Social Interaction in Economics: Cigarette Smoking Among Young People in the United States, 1992-1999," NBER Working Papers 10409, National Bureau of Economic Research, Inc.
    18. R. Luce & Albert Perry, 1949. "A method of matrix analysis of group structure," Psychometrika, Springer, Springer, vol. 14(2), pages 95-116, June.
    19. Glen Ellison, 2010. "Learning, Local Interaction, and Coordination," Levine's Working Paper Archive 391, David K. Levine.
    20. Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1997. "Pure Strategy Nash Equilibrium in a Group Formation Game with Positive Externalities," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 161-182, October.
    21. R. Florian & S. Galam, 2000. "Optimizing conflicts in the formation of strategic alliances," The European Physical Journal B - Condensed Matter and Complex Systems, Springer, Springer, vol. 16(1), pages 189-194, July.
    22. Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
    23. Bayer, Patrick & Timmins, Christopher, 2005. "On the equilibrium properties of locational sorting models," Journal of Urban Economics, Elsevier, vol. 57(3), pages 462-477, May.
    24. Blume Lawrence E., 1993. "The Statistical Mechanics of Strategic Interaction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 387-424, July.
    25. Robert Axelrod & Will Mitchell & Robert E. Thomas & D. Scott Bennett & Erhard Bruderer, 1995. "Coalition Formation in Standard-Setting Alliances," Management Science, INFORMS, INFORMS, vol. 41(9), pages 1493-1508, September.
    26. Blume,L.E. & Durlauf,S.N., 2000. "The interactions-based approach to socioeconomic behavior," Working papers, Wisconsin Madison - Social Systems 1, Wisconsin Madison - Social Systems.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Le Breton, Michel & Weber, Shlomo, 2011. "Games of social interactions with local and global externalities," Economics Letters, Elsevier, vol. 111(1), pages 88-90, April.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:7279. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.