Farsighted manipulation and exploitation in networks

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

No 23, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: Economic agents with an increased sophistication sometimes use their advantage to exploit their more naive counterparts. In public goods games played on networks, such an agent will attempt to manipulate as many of his neighbors as possible to produce 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. In the long run, the farsighted player’s effects are only felt locally. A simple dependence-withdrawal strategy reaches the optimal outcome for every network if the starting state is unfavorable, and reaches it for every starting state if the farsighted player is linked to all opponents. We characterize the lower and upper bounds of long-run payoffs the farsighted player can attain in a given network and make comparative statics with respect to adding a new link. The farsighted player always benefits from linking to more opponents (sociability) and is always harmed by his neighbors linking to each other (jealousy).

JEL-codes: C73 D85 H41 (search for similar items in EconPapers)
Date: 2019-08-29
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-mic, nep-ore and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://cris.maastrichtuniversity.nl/ws/files/36256252/RM19023.pdf (application/pdf)

Related works:
Journal Article: Farsighted manipulation and exploitation in networks (2021)
Working Paper: Farsighted manipulation and exploitation in networks (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2019023

DOI: 10.26481/umagsb.2019023

Access Statistics for this paper

More papers in Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE) Contact information at EDIRC.
Bibliographic data for series maintained by Andrea Willems () and Leonne Portz ().