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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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    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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