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Games of Social Influence

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Author Info
Andrea Galeotti ()
Sanjeev Goyal

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Abstract

This paper considers a game played among players who seek to extract payoffs from a group of individuals subject to local interaction effects. We are interested in the relation between the network of social interaction and equilibrium actions and payoffs. We start with an analysis of two economic examples – strategic advertising in the presence of word of mouth advertising and social non-competitive marketing – to bring out the simple point that changing network connections can increase as well as decrease equilibrium actions and payoffs. This leads to an investigation of general conditions on payoffs under which equilibrium actions and payoffs increase/decrease with an increase in density of connections. We also develop conditions under which a greater dispersion in network connections leads unambiguously to positive and negative effects on actions as well as payoffs.

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File URL: http://www.essex.ac.uk/economics/discussion-papers/papers-text/dp639.pdf
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Paper provided by University of Essex, Department of Economics in its series Economics Discussion Papers with number 639.

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Date of creation: 25 Sep 2007
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Handle: RePEc:esx:essedp:639

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  1. Timothy G. Conley & Christopher R. Udry, 2005. "Learning about a new technology: pineapple in Ghana," Proceedings, Federal Reserve Bank of San Francisco. [Downloadable!]
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  2. Ellison, Glenn & Fudenberg, Drew, 1993. "Rules of Thumb for Social Learning," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 612-43, August. [Downloadable!] (restricted)
    Other versions:
  3. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Blackwell Publishing, vol. 51(1), pages 63-81, January. [Downloadable!] (restricted)
  4. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December. [Downloadable!] (restricted)
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  5. Andrea Galeotti & Sanjeev Goyal & Matthew O. Jackson & Fernando Vega-Redondo & Leeat Yariv, 2008. "Network Games," Economics Working Papers ECO2008/07, European University Institute. [Downloadable!]
  6. Ellison, Glenn & Fudenberg, Drew, 1995. "Word-of-Mouth Communication and Social Learning," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 93-125, February. [Downloadable!] (restricted)
  7. Andrea Galeotti & Sanjeev Goyal, 2007. "A Theory of Strategic Diffusion," Economics Discussion Papers 635, University of Essex, Department of Economics. [Downloadable!]
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  8. Coralio Ballester & Antoni Calvo-Armengol & Yves Zenou, 2005. "Who's Who in Networks. Wanted: the Key Player," NajEcon Working Paper Reviews 666156000000000586, www.najecon.org. [Downloadable!]
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  9. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July. [Downloadable!] (restricted)
  10. Dunia López-Pintado, 2004. "Diffusion In Complex Social Networks," Working Papers. Serie AD 2004-33, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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