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Local Spillovers, Convexity and the Strategic Substitutes Property in Networks

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  • Pascal Billand

    ()
    (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon)

  • Christophe Bravard

    ()
    (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon)

  • Sudipta Sarangi

    (Department of Economics, Louisiana State University - Department of Economics, Louisiana State University)

Abstract

We provide existence results in a game with local spillovers where the payoff function satisfies both convexity and the strategic substitutes property. We show that there always exists a stable pairwise network in this game, and provide a condition which ensures the existence of pairwise equilibrium networks. Moreover, our existence proof allows us to characterize a pairwise equilibrium of these networks.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00574265.

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Date of creation: 2011
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Handle: RePEc:hal:journl:halshs-00574265

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Keywords: networks; existence; spillovers;

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  1. Taiji Furusawa & Hideo Konishi, 2003. "Free Trade Networks," Working Papers 2003.55, Fondazione Eni Enrico Mattei.
  2. Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer, vol. 34(3), pages 319-349, October.
  3. Paul Belleflamme & Francis Bloch, 2001. "Market Sharing Agreements and Collusive Networks," Working Papers 443, Queen Mary, University of London, School of Economics and Finance.
  4. Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2012. "Directed Networks with Spillovers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(6), pages 849-878, December.
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Cited by:
  1. Tim Hellmann, 2013. "On the existence and uniqueness of pairwise stable networks," International Journal of Game Theory, Springer, vol. 42(1), pages 211-237, February.
  2. Philipp Möhlmeier & Agnieszka Rusinowska & Emily Tanimura, 2013. "A degree-distance-based connections model with negative and positive externalities," Working Papers 479, Bielefeld University, Center for Mathematical Economics.

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