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Network games under strategic complementarities

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  • Belhaj, Mohamed
  • Bramoullé, Yann
  • Deroïan, Frédéric

Abstract

We study network games under strategic complementarities. Agents are embedded in a fixed network. They choose a positive, continuous action and interact with their network neighbors. Interactions are positive and actions are bounded from above. We first derive new sufficient conditions for uniqueness, covering all concave as well as some non-concave best responses. We then study the relationship between position and action and identify situations where a more central agent always plays a higher action in equilibrium. We finally analyze comparative statics. We show that a shock may not propagate throughout the entire network and uncover a general pattern of decreasing interdependence.

Suggested Citation

  • Belhaj, Mohamed & Bramoullé, Yann & Deroïan, Frédéric, 2014. "Network games under strategic complementarities," Games and Economic Behavior, Elsevier, vol. 88(C), pages 310-319.
    • Handle: RePEc:eee:gamebe:v:88:y:2014:i:c:p:310-319
    DOI: 10.1016/j.geb.2014.10.009
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    More about this item

    Keywords

    Network games; Strategic complementarities; Centrality; Uniqueness; Interdependence;
    All these keywords.

    JEL classification:

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

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