IDEAS home Printed from https://ideas.repec.org/a/eee/regeco/v40y2010i6p397-406.html
   My bibliography  Save this article

Interactions with hidden complementarities

Author

Listed:
  • Ballester, Coralio
  • Calvó-Armengol, Antoni

Abstract

We consider a finite population simultaneous move game with heterogeneous interaction modes across different pairs of players. We allow for general interaction patterns, but restrict our analysis to games whose pure strategy Nash equilibrium conditions boil down to a set of piece-wise linear conditions, so that an equilibrium is a solution to a linear complementarity problem. We introduce a new class of games for which a suitable linear transformation of the original interaction matrix induces a game with complementarities. We provide general moderation conditions on the interaction matrix such that a game in this class has a unique Nash equilibrium, that we are able to characterize by means of a closed-form expression involving a generalized version of the Katz network measure of node centrality.

Suggested Citation

  • Ballester, Coralio & Calvó-Armengol, Antoni, 2010. "Interactions with hidden complementarities," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 397-406, November.
  • Handle: RePEc:eee:regeco:v:40:y:2010:i:6:p:397-406
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166-0462(10)00030-X
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    2. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2010. "Delinquent Networks," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 34-61, March.
    3. Charles D. Kolstad & Lars Mathiesen, 1987. "Necessary and Sufficient Conditions for Uniqueness of a Cournot Equilibrium," Review of Economic Studies, Oxford University Press, vol. 54(4), pages 681-690.
    4. Bamon, Rodrigo & Fraysse, Jean, 1985. "Existence of Cournot Equilibrium in Large Markets," Econometrica, Econometric Society, vol. 53(3), pages 587-597, May.
    5. Vives, Xavier, 1990. "Nash equilibrium with strategic complementarities," Journal of Mathematical Economics, Elsevier, vol. 19(3), pages 305-321.
    6. Milgrom, Paul & Roberts, John, 1990. "Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities," Econometrica, Econometric Society, vol. 58(6), pages 1255-1277, November.
    7. Borjas, George J., 1998. "To Ghetto or Not to Ghetto: Ethnicity and Residential Segregation," Journal of Urban Economics, Elsevier, vol. 44(2), pages 228-253, September.
    8. Leo Katz, 1953. "A new status index derived from sociometric analysis," Psychometrika, Springer;The Psychometric Society, vol. 18(1), pages 39-43, March.
    9. Antoni Calvó-Armengol & Joan de Martí, 2007. "Communication Networks: Knowledge and Decisions," American Economic Review, American Economic Association, vol. 97(2), pages 86-91, May.
    10. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hernández, Penélope & Muñoz-Herrera, Manuel & Sánchez, Ángel, 2013. "Heterogeneous network games: Conflicting preferences," Games and Economic Behavior, Elsevier, vol. 79(C), pages 56-66.
    2. Rébillé, Yann & Richefort, Lionel, 2014. "Equilibrium existence and uniqueness in network games with additive preferences," European Journal of Operational Research, Elsevier, vol. 232(3), pages 601-606.
    3. Belhaj, Mohamed & Deroïan, Frédéric, 2012. "Risk taking under heterogenous revenue sharing," Journal of Development Economics, Elsevier, vol. 98(2), pages 192-202.
    4. Junjie Zhou & Ying-Ju Chen, 2013. "Targeted information release in social networks," Working Papers 13-04, NET Institute.
    5. Belhaj, Mohamed & Bramoullé, Yann & Deroïan, Frédéric, 2014. "Network games under strategic complementarities," Games and Economic Behavior, Elsevier, vol. 88(C), pages 310-319.
    6. Mohamed Belhaj & Sebastian Bervoets & Frédéric Deroïan, 2013. "Network Design under Local Complementarities," AMSE Working Papers 1309, Aix-Marseille School of Economics, Marseille, France, revised 12 Feb 2013.
    7. Itoh, Ryo, 2014. "Tax discrimination against inter-firm networks," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 25-35.
    8. Bloch, Francis & Quérou, Nicolas, 2013. "Pricing in social networks," Games and Economic Behavior, Elsevier, vol. 80(C), pages 243-261.
    9. Belhaj, Mohamed & Deroïan, Frédéric, 2013. "Strategic interaction and aggregate incentives," Journal of Mathematical Economics, Elsevier, vol. 49(3), pages 183-188.
    10. Norris, Jonathan, 2017. "Family and Peer Social Identity Effects on Schooling Attitudes and Performance," UNCG Economics Working Papers 17-1, University of North Carolina at Greensboro, Department of Economics.
    11. Bayer, Péter & Herings, P. Jean-Jacques & Peeters, Ronald & Thuijsman, Frank, 2017. "Adaptive Learning in Weighted Network Games," Research Memorandum 025, Maastricht University, Graduate School of Business and Economics (GSBE).
    12. Mohamed Belhaj & Sebastian Bervoets & Frédéric Deroïan, 2013. "Network Design under Local Complementarities," Working Papers halshs-00796487, HAL.

    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:regeco:v:40:y:2010:i:6:p:397-406. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/regec .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.