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Regime change in large information networks

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  • de Martí, Joan
  • Milán, Pau

Abstract

We study global games of regime change within networks of truthful communication. Agents can choose between attacking and not attacking a status quo, whose strength is unknown. Players share private signals of the state with their immediate neighbors. Communication with neighbors introduces local correlations in posterior beliefs, and also pools information. In order to isolate the latter effect, we provide sparseness conditions on networks that allow for asymptotic approximations that eliminate covariances from equilibrium strategies. We ask how changes in the distribution of connectivities in the population affect the type of coordination in equilibrium as well as the likelihood of successful rally. We find that, without public signals, strategic incentives align and the probability of success remains independent of the network. With a public signal, the distribution of degrees unambiguously affects the probability of success, although the direction of change is not monotone and depends on the cost of attacking.

Suggested Citation

  • de Martí, Joan & Milán, Pau, 2019. "Regime change in large information networks," Games and Economic Behavior, Elsevier, vol. 113(C), pages 262-284.
    • Handle: RePEc:eee:gamebe:v:113:y:2019:i:c:p:262-284
    DOI: 10.1016/j.geb.2018.09.010
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    More about this item

    Keywords

    Regime change; Global games; Networks; Monotone games; Threshold strategies; Revolution;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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