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Efficient networks in games with local complementarities

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  • Mohamed Belhaj

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Sebastian Bervoets

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Frédéric Deroïan

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

We address the problem of a planner looking for the efficient network when agents play a network game with local complementarities and links are costly. We show that for general network cost functions, efficient networks belong to the class of Nested-Split Graphs. Next, we refine our results and find that, depending on the specification of the network cost function, complete networks, core-periphery networks, dominant group architectures, quasi-star and quasi-complete networks can be efficient.

Suggested Citation

  • Mohamed Belhaj & Sebastian Bervoets & Frédéric Deroïan, 2016. "Efficient networks in games with local complementarities," Post-Print hal-01446213, HAL.
    • Handle: RePEc:hal:journl:hal-01446213
    DOI: 10.3982/TE1742
    Note: View the original document on HAL open archive server: https://amu.hal.science/hal-01446213
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    References listed on IDEAS

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    More about this item

    Keywords

    nested split graphs; network games; strategic complementarity;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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