Refinement of the equilibrium of public goods games over networks: efficiency and effort of specialized equilibria

DOI10.1016/J.JMATECO.2018.04.002MaRDI QIDQ1633669zbMATH OpenOpenAlexWikidataFDO

Authors Parthe Pandit, Ankur A. Kulkarni

Publication date 20 December 2018

Published in Journal of Mathematical Economics (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1607.02037

zbMATH Keywords

independent setslinear complementarity problemsnetwork gamespublic goodsspecialized equilibria

Mathematics Subject Classification ID

Games involving graphs (91A43) Public goods (91B18)

Abstract: Recently Bramoulle and Kranton presented a model for the provision of public goods over a network and showed the existence of a class of Nash equilibria called specialized equilibria wherein some agents exert maximum effort while other agents free ride. We examine the efficiency, effort and cost of specialized equilibria in comparison to other equilibria. Our main results show that the welfare of a particular specialized equilibrium approaches the maximum welfare amongst all equilibria as the concavity of the benefit function tends to unity. For forest networks a similar result also holds as the concavity approaches zero. Moreover, without any such concavity conditions, there exists for any network a specialized equilibrium that requires the maximum weighted effort amongst all equilibria. When the network is a forest, a specialized equilibrium also incurs the minimum total cost amongst all equilibria. For well-covered forest networks we show that all welfare maximizing equilibria are specialized and all equilibria incur the same total cost. Thus we argue that specialized equilibria may be considered as a refinement of the equilibrium of the public goods game. We show several results on the structure and efficiency of equilibria that highlight the role of dependants in the network.

Recommendations

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Cites work

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Cited in

(7)

• On independent cliques and linear complementarity problems
• Information revelation through signalling
• Decentralized incentives for general well-being in networked public goods game
• Aggregate play and welfare in strategic interactions on networks
• Public goods in networks with constraints on sharing
• A scalable Bayesian persuasion framework for epidemic containment on heterogeneous networks
• Public goods in networks

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