Local Spillovers, Convexity and the Strategic Substitutes Property in Networks
AbstractWe 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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Date of creation: 2011
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networks; existence; spillovers;
Other versions of this item:
- Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2011. "Local Spillovers, Convexity and the Strategic Substitutes Property in Networks," Working Papers 1110, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Sudipta Sarangi & Pascal Billand & Christophe Bravard, . "Local Spillovers, Convexity and the Strategic Substitutes Property in Networks," Departmental Working Papers 2011-01, Department of Economics, Louisiana State University.
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-19 (All new papers)
- NEP-CSE-2011-03-19 (Economics of Strategic Management)
- NEP-NET-2011-03-19 (Network Economics)
- NEP-URE-2011-03-19 (Urban & Real Estate Economics)
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