Aggregation in Networks

Nizar Allouch

Studies in Economics from School of Economics, University of Kent

Abstract: In this paper, we show that a concept of aggregation can hold in large network games with linear best replies. Breaking up large networks into smaller subnetworks, which can be replaced by representative players, leads to a coarse-grained description of strategic interactions. This method of summarizing complex strategic interactions by simple ones can be applied to compute all Nash equilibria for the special network structure of cograph. A key finding is that a stable Nash equilibrium of the large network game can be decomposed into a collection of Nash equilibria of subnetwork games. Thereby, we establish a systematic relationship between player’s position in a subnetwork and his equilibrium action in the large network game.

Keywords: aggregation; modular decomposition; network games; public goods; stability (search for similar items in EconPapers)
JEL-codes: C72 D31 D85 H41 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-gth, nep-mic, nep-net and nep-ore
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Working Paper: Aggregation in Networks (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ukc:ukcedp:2109

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