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Heterogeneous network games: Conflicting preferences

Author

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  • Hernández, Penélope
  • Muñoz-Herrera, Manuel
  • Sánchez, Ángel

Abstract

In many economic situations, a player pursues coordination or anti-coordination with her neighbors on a network, but she also has intrinsic preferences among the available options. We here introduce a model which allows to analyze this issue by means of a simple framework in which players endowed with an idiosyncratic identity interact on a social network through strategic complements or substitutes. We classify the possible types of Nash equilibria under complete information, finding two thresholds for switching action that relate to the two-player setup of the games. This structure of equilibria is considerably reduced when turning to incomplete information, in a setup in which players only know the distribution of the number of neighbors of the network. For high degrees of heterogeneity in the population the equilibria is such that every player can choose her preferred action, whereas if one of the identities is in the minority frustration ensues.

Suggested Citation

  • Hernández, Penélope & Muñoz-Herrera, Manuel & Sánchez, Ángel, 2013. "Heterogeneous network games: Conflicting preferences," Games and Economic Behavior, Elsevier, vol. 79(C), pages 56-66.
  • Handle: RePEc:eee:gamebe:v:79:y:2013:i:c:p:56-66
    DOI: 10.1016/j.geb.2013.01.004
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    Cited by:

    1. Sanjeev Goyal & Penélope Hernández & Guillem Martínez-Cánovas & Frédéric Moisan & Manuel Muñoz-Herrera & Angel Sánchez, 2021. "Integration and diversity," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 387-413, June.
      • Goyal, S. & Hernández, P. & Muñnez-Cánovasz, G. & Moisan, F. & Muñoz-Herrera, M. & Sánchez, A., 2017. "Integration and Diversity," Cambridge Working Papers in Economics 1721, Faculty of Economics, University of Cambridge.
      • Sanjeev Goyal & Penelope Hernandez & Guillem Martinez-Canovas & Frederic Moisan & Manuel Munoz-Herrera & Angel Sanchez, 2019. "Integration and Diversity," Working Papers 20190025, New York University Abu Dhabi, Department of Social Science, revised Sep 2020.
      • Sanjeev Goyal & Penélope Hernández & Guillem Martínez-Cánovas & Frederic Moisan & Manuel Muñoz-Herrera & Angel Sánchez, 2021. "Integration and Diversity," Post-Print hal-03188210, HAL.
      • Sanjeev Goyal & Pénélope Hernández & Guillem Martínez-Cánovas & Frédéric Moisan & Manuel Muñoz-Herrera & Ángel Sánchez, 2021. "Integration and diversity," Post-Print halshs-03051962, HAL.
    2. Correia, A.D. & Leestmaker, L.L. & Stoof, H.T.C. & Broere, J.J., 2022. "Asymmetric games on networks: Towards an Ising-model representation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 593(C).
    3. Francesca Lipari & Massimo Stella & Alberto Antonioni, 2019. "Investigating Peer and Sorting Effects within an Adaptive Multiplex Network Model," Games, MDPI, vol. 10(2), pages 1-12, March.
    4. Zhigang Cao & Cheng-zhong Qin & Xiaoguang Yang & Boyu Zhang, 2019. "Dynamic matching pennies on networks," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(3), pages 887-920, September.

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    More about this item

    Keywords

    Heterogeneity; Social networks; Incomplete information; Bayesian equilibrium;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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