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A Theory of Network Games Part 1: Utility Representations

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  • Joseph Root
  • Evan Sadler

Abstract

We demonstrate that a ubiquitous feature of network games, bilateral strategic interactions, is equivalent to having player utilities that are additively separable across opponents. We distinguish two formal notions of bilateral strategic interactions. Opponent independence means that player i's preferences over opponent j's action do not depend on what other opponents do. Strategic independence means that how opponent j's choice influences i's preference between any two actions does not depend on what other opponents do. If i's preferences jointly satisfy both conditions, then we can represent her preferences over strategy profiles using an additively separable utility. If i's preferences satisfy only strategic independence, then we can still represent her preferences over just her own actions using an additively separable utility. Common utilities based on a linear aggregate of opponent actions satisfy strategic independence and are therefore strategically equivalent to additively separable utilities--in fact, we can assume a utility that is linear in opponent actions.

Suggested Citation

  • Joseph Root & Evan Sadler, 2026. "A Theory of Network Games Part 1: Utility Representations," Papers 2602.16071, arXiv.org, revised Feb 2026.
    • Handle: RePEc:arx:papers:2602.16071
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    References listed on IDEAS

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    1. Guy Tchuente, 2026. "Who Matters to Whom? Identifying Peer Effects with Propagation Geometry," Papers 2602.23594, arXiv.org.

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