Existence of Pure Strategies Nash Equilibria in Social Interaction Games with Dyadic Externalities

Michel Le Breton and Shlomo Weber

No 7279, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In this note we introduce a general class of games where the payoff of every player are affected by her intrinsic taste for available strategic choices; intensity of her dyadic social interactions of with others in the peer group; and conformity effect. We show, that if the dyadic social influences are symmetric and the conformity effect is identical for all players, every game in our class admits a Nash equilibrium in pure strategies. Our proof relies on the fact that our game is potential (Rosenthal (1973), Monderer and Shapley (1996)). We also illustrate the universality of our result through a large spectrum of applications in economics, political science and sociology.

Keywords: Conformity effect; Dyadic externalities; Nash equilibria; Potential games; Social interactions (search for similar items in EconPapers)
JEL-codes: C72 D85 (search for similar items in EconPapers)
Date: 2009-04
New Economics Papers: this item is included in nep-gth, nep-net and nep-soc
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Citations: View citations in EconPapers (1)

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