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Multiple Activities in Networks

Author

Listed:
  • Ying-Ju Chen
  • Yves Zenou
  • Junjie Zhou

Abstract

We consider a network model where individuals exert efforts in two types of activities that are interdependent. These activities can be either substitutes or complements. We provide a full characterization of the Nash equilibrium of this game for any network structure. We show, in particular, that quadratic games with linear best-reply functions aggregate nicely to multiple activities because equilibrium efforts obey similar formulas to that of the one-activity case. We then derive some comparative statics results showing how own productivity affects equilibrium efforts and how network density impacts equilibrium outcomes.

Suggested Citation

  • Ying-Ju Chen & Yves Zenou & Junjie Zhou, 2018. "Multiple Activities in Networks," American Economic Journal: Microeconomics, American Economic Association, vol. 10(3), pages 34-85, August.
  • Handle: RePEc:aea:aejmic:v:10:y:2018:i:3:p:34-85
    Note: DOI: 10.1257/mic.20160253
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    Citations

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    Cited by:

    1. Joshi, Sumit & Mahmud, Ahmed Saber & Sarangi, Sudipta, 2020. "Network formation with multigraphs and strategic complementarities," Journal of Economic Theory, Elsevier, vol. 188(C).
    2. Benjamin Golub & Evan Sadler, 2021. "Games on Endogenous Networks," Papers 2102.01587, arXiv.org.
    3. Lindquist, Matthew J. & Zenou, Yves, 2019. "Crime and Networks: 10 Policy Lessons," IZA Discussion Papers 12534, Institute of Labor Economics (IZA).
    4. Parise, Francesca & Ozdaglar, Asuman, 2019. "A variational inequality framework for network games: Existence, uniqueness, convergence and sensitivity analysis," Games and Economic Behavior, Elsevier, vol. 114(C), pages 47-82.
    5. Allouch, Nizar & King, Maia, 2020. "Welfare targeting in networks," SocArXiv 74mur, Center for Open Science.
    6. Ryo Itoh & Zonghui Li, 2021. "Effects of dual networks on tax strategies: geography and transaction," The Japanese Economic Review, Springer, vol. 72(1), pages 97-128, January.
    7. Jiao, Qian & Xu, Jin, 2020. "Competition for networked agents in the lottery Blotto game," Economics Letters, Elsevier, vol. 197(C).
    8. Walsh, A. M., 2019. "Games on Multi-Layer Networks," Cambridge Working Papers in Economics 1954, Faculty of Economics, University of Cambridge.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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