IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v260y2026ics0165176526000182.html

Welfare bounds for linear-quadratic network games

Author

Listed:
  • Iwanaga, Yuki
  • Kobayashi, Teruyoshi

Abstract

This paper quantifies the efficiency of the Nash equilibrium in the class of linear-quadratic network games. We show that the theoretical bounds of the welfare ratio, defined as the equilibrium welfare relative to the social optimum, are fully characterized by the spectrum of the adjacency matrix of the underlying network. Specifically, the lower bound of the welfare ratio is determined by the largest eigenvalue of the adjacency matrix, while the upper bound reaches unity whenever the matrix is rank-deficient. Applying the theory to empirical social networks, we find that the upper bounds tend to be close to unity.

Suggested Citation

  • Iwanaga, Yuki & Kobayashi, Teruyoshi, 2026. "Welfare bounds for linear-quadratic network games," Economics Letters, Elsevier, vol. 260(C).
    • Handle: RePEc:eee:ecolet:v:260:y:2026:i:c:s0165176526000182
    DOI: 10.1016/j.econlet.2026.112824
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176526000182
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2026.112824?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:260:y:2026:i:c:s0165176526000182. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.