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Supporting others and the evolution of influence

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  • Barbera, Salvador
  • Perea, Andres

Abstract

In this paper we study environments in which agents can transfer influence to others by supporting them. When planning whom to support, they should take into account the future effect of this, since the receiving agent might use this influence to support others in the future. We show that in the presence of a finite horizon there is an essentially unique optimal support behavior which can be characterized in terms of associated value functions. The analysis of these value functions allows us to derive qualitative properties of optimal support strategies under different specific environments and to explicitly compute the optimal support behavior in some numerical examples. We also investigate the case of an infinite horizon. Examples show that multiple equilibria may appear in this setting, some of wich sustaining a degree of cooperation that would not be possible under a finite horizon.
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Suggested Citation

  • Barbera, Salvador & Perea, Andres, 2002. "Supporting others and the evolution of influence," Journal of Economic Dynamics and Control, Elsevier, vol. 26(12), pages 2051-2092, October.
    • Handle: RePEc:eee:dyncon:v:26:y:2002:i:12:p:2051-2092
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    1. Gomes, Armando & Hart, Sergiu & Mas-Colell, Andreu, 1999. "Finite Horizon Bargaining and the Consistent Field," Games and Economic Behavior, Elsevier, vol. 27(2), pages 204-228, May.
    2. Kreps, David M & Porteus, Evan L, 1979. "Dynamic Choice Theory and Dynamic Programming," Econometrica, Econometric Society, vol. 47(1), pages 91-100, January.
    3. Barbera, S. & Maschler, M. & Shalev, J., 2001. "Voting for Voters: A Model of Electoral Evolution," Games and Economic Behavior, Elsevier, vol. 37(1), pages 40-78, October.
    4. SCHMEIDLER, David, 1973. "Equilibrium points of nonatomic games," LIDAM Reprints CORE 146, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Peter A. Streufert, 1990. "Stationary Recursive Utility and Dynamic Programming under the Assumption of Biconvergence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 79-97.
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    Cited by:

    1. Gustavo Bergantiños & Jordi Massó & Alejandro Neme, 2018. "On societies choosing social outcomes, and their memberships: internal stability and consistency," Theory and Decision, Springer, vol. 84(1), pages 83-97, January.
    2. Dolors Berga & Alejandro Neme & Jordi Massó & Gustavo Bergantiños, 2008. "On two basic properties of equilibria of voting with exit," Economics Bulletin, AccessEcon, vol. 4(21), pages 1-9.
    3. Barberá, Salvador, 2003. "Designing Decisions Rules for Transnational Infrastructure Projects," IDB Publications (Working Papers) 3200, Inter-American Development Bank.

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