Farsighted manipulation and exploitation in networks

Peter Bayer, P. Jean-Jacques Herings and Ronald Peeters

Journal of Economic Theory, 2021, vol. 196, issue C

Abstract: Farsighted economic agents can use their advantage to exploit their more myopic counterparts. In public goods games played on networks, such an agent will attempt to manipulate as many of his neighbors as possible to contribute to the public good. We study the exploitation of a myopic population by a single farsighted player in such games. We show the existence and payoff-uniqueness of optimal farsighted strategies in every network structure. For all optimal strategies, the set of absorbing effort profiles is non-empty and is generally neither a subset or a superset of the set of Nash equilibria of the static game. Optimal long-run effort profiles for the farsighted player can be reached via a simple dependence-withdrawal strategy and the farsighted player's effects on the myopic players are only felt locally. We characterize the lower and upper bounds of long-run payoffs the farsighted player can attain in a given network and examine comparative statics with respect to adding a new link. The farsighted player always benefits from linking to more opponents and is always harmed by his neighbors linking to each other.

Keywords: Networks; Public goods; Myopic and farsighted players (search for similar items in EconPapers)
JEL-codes: C73 D85 H41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Farsighted manipulation and exploitation in networks (2021)
Working Paper: Farsighted manipulation and exploitation in networks (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:196:y:2021:i:c:s0022053121001289

DOI: 10.1016/j.jet.2021.105311

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