Aggregate play and welfare in strategic interactions on networks

DOI10.1016/J.JMATECO.2020.02.006zbMATH Open1434.91018arXiv1906.07630OpenAlexW3011324735MaRDI QIDQ2178587FDOQ2178587

Karan N. Chadha, Ankur A. Kulkarni

Publication date: 11 May 2020

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

Abstract: In recent work by Bramoull'{e} and Kranton, a model for the provision of public goods on a network was presented and relations between equilibria of such a game and properties of the network were established. This model was further extended to include games with imperfect substitutability in Bramoull'{e} et al. The vast multiplicity of equilibria in such games along with the drastic changes in equilibria with small changes in network structure, makes it challenging for a system planner to estimate the maximum social welfare of such a game or to devise interventions that enhance this welfare. Our main results address this challenge by providing close approximations to the maximum social welfare and the maximum aggregate play in terms of only network characteristics such as the maximum degree and independence number. For the special case when the underlying network is a tree, we derive formulae which use only the number of nodes and their degrees. These results allow a system planner to assess aggregate outcomes and design interventions for the game, directly from the underlying graph structure, without enumerating all equilibria of the game, thereby significantly simplifying the planner's problem. A part of our results can be viewed as a logical extension of [7] where the maximum weighted aggregate effort of the model in [2] was characterized as the weighted independence number of the graph.

Full work available at URL: https://arxiv.org/abs/1906.07630

zbMATH Keywords

linear complementarity problemsindependent setspublic goods gamegames on networkscliques

Mathematics Subject Classification ID

Applications of game theory (91A80) Games involving graphs (91A43) Welfare economics (91B15) Public goods (91B18)

Cites Work

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• Who's Who in Networks. Wanted: The Key Player
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Cited In (2)

• Equilibrium design in an \(n\)-player quadratic game
• Group play in games and the role of consent in network formation

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