Networks in Conflict: A Variational Inequality Approach

Yves Zenou, Jin Xu and Junjie Zhou

No 13647, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study a very general contest game in which players exert efforts in multiple battles. The conflict structure, which represents who participates in which battlefield, is arbitrary and can be represented by a hypergraph. We show, under mild conditions on the cost function and contest technology, that the set of pure strategy Nash equilibria is nonempty and convex, and provide equivalent characterizations using techniques from Variational Inequality (VI). We demonstrate that the strong monotonicity of the cost function always implies the uniqueness of Nash equilibrium regardless of the conflict structure. We also perform an extensive comparative statics analysis with respect to the parameters of the model and discuss several applications of our model. Our general model incorporates many existing models of single or multi-battle contests as special cases when the conflict network and/or the cost function take particular forms.

Keywords: Network games; Contests; Variational inequality (search for similar items in EconPapers)
JEL-codes: C72 D74 D85 (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-gth, nep-mic and nep-soc
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Citations: View citations in EconPapers (6)

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