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Network games with incomplete information

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  • de Martí, Joan
  • Zenou, Yves

Abstract

We consider a network game with strategic complementarities where the individual reward or the strength of interactions is only partially known by the agents. Players receive different correlated signals and they make inferences about other players’ information. We demonstrate that there exists a unique Bayesian-Nash equilibrium. We characterize the equilibrium by disentangling the information effects from the network effects and show that the equilibrium effort of each agent is a weighted combinations of different Katz–Bonacich centralities.

Suggested Citation

  • de Martí, Joan & Zenou, Yves, 2015. "Network games with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 221-240.
  • Handle: RePEc:eee:mateco:v:61:y:2015:i:c:p:221-240
    DOI: 10.1016/j.jmateco.2015.10.002
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    Cited by:

    1. Dirk Bergemann & Stephen Morris, 2013. "Robust Predictions in Games With Incomplete Information," Econometrica, Econometric Society, vol. 81(4), pages 1251-1308, July.
    2. Bergemann, Dirk & Morris, Stephen, 2017. "Belief-free rationalizability and informational robustness," Games and Economic Behavior, Elsevier, vol. 104(C), pages 744-759.
    3. Benjamin Golub & Stephen Morris, 2020. "Expectations, Networks, and Conventions," Papers 2009.13802, arXiv.org.
    4. Dirk Bergemann & Stephen Morris, 2013. "Robust Predictions in Games With Incomplete Information," Econometrica, Econometric Society, vol. 81(4), pages 1251-1308, July.
    5. Mariann Ollar & Antonio Penta, 2021. "A network solution to robust implementation: The case of identical but unknown distributions," Economics Working Papers 1776, Department of Economics and Business, Universitat Pompeu Fabra.
    6. UI, Takashi, 2015. "Bayesian Nash Equilibrium and Variational Inequalities," Discussion Papers 2015-08, Graduate School of Economics, Hitotsubashi University.
    7. Alex Centeno, 2022. "A Structural Model for Detecting Communities in Networks," Papers 2209.08380, arXiv.org, revised Oct 2022.
    8. Andrea Galeotti & Benjamin Golub & Sanjeev Goyal, 2020. "Targeting Interventions in Networks," Econometrica, Econometric Society, vol. 88(6), pages 2445-2471, November.
    9. Boucher, Vincent, 2016. "Conformism and self-selection in social networks," Journal of Public Economics, Elsevier, vol. 136(C), pages 30-44.
    10. Dirk Bergemann & Stephen Morris, 2013. "Robust Predictions in Games With Incomplete Information," Econometrica, Econometric Society, vol. 81(4), pages 1251-1308, July.
    11. Leister, C. Matthew, 2020. "Information acquisition and welfare in network games," Games and Economic Behavior, Elsevier, vol. 122(C), pages 453-475.
    12. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2017. "The Economic Consequences of Social-Network Structure," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 49-95, March.
    13. Zenou, Yves, 2014. "Key Players," CEPR Discussion Papers 10277, C.E.P.R. Discussion Papers.
    14. Ryo Itoh & Zonghui Li, 2021. "Effects of dual networks on tax strategies: geography and transaction," The Japanese Economic Review, Springer, vol. 72(1), pages 97-128, January.
    15. Chen, Hong & Lam, Jasmine Siu Lee & Liu, Nan, 2018. "Strategic investment in enhancing port–hinterland container transportation network resilience: A network game theory approach," Transportation Research Part B: Methodological, Elsevier, vol. 111(C), pages 83-112.
    16. Julia Müller & Thorsten Upmann, 2017. "Eigenvalue Productivity: Measurement of Individual Contributions in Teams," CESifo Working Paper Series 6679, CESifo.
    17. Jan Gromadzki & Przemysław Siemaszko, 2022. "#IamLGBT: Social Networks and Coming Out," IBS Working Papers 06/2022, Instytut Badan Strukturalnych.
    18. Dirk Bergemann & Stephen Morris, 2013. "Robust Predictions in Games With Incomplete Information," Econometrica, Econometric Society, vol. 81(4), pages 1251-1308, July.
    19. Ui, Takashi, 2016. "Bayesian Nash equilibrium and variational inequalities," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 139-146.
    20. Emerson Melo, 2018. "A Variational Approach to Network Games," Working Papers 2018.05, Fondazione Eni Enrico Mattei.
    21. Belhaj, Mohamed & Deroïan, Frédéric, 2021. "The value of network information: Assortative mixing makes the difference," Games and Economic Behavior, Elsevier, vol. 126(C), pages 428-442.

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    More about this item

    Keywords

    Social networks; Strategic complementarities; Bayesian games;
    All these keywords.

    JEL classification:

    • 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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