Strategic Interaction and Networks

Yann Bramoull?, Rachel Kranton and Martin D'Amours
Authors registered in the RePEc Author Service: Yann Bramoullé

American Economic Review, 2014, vol. 104, issue 3, 898-930

Abstract: Geography and social links shape economic interactions. In industries, schools, and markets, the entire network determines outcomes. This paper analyzes a large class of games and obtains a striking result. Equilibria depend on a single network measure: the lowest eigenvalue. This paper is the first to uncover the importance of the lowest eigenvalue to economic and social outcomes. It captures how much the network amplifies agents' actions. The paper combines new tools?potential games, optimization, and spectral graph theory?to solve for all Nash and stable equilibria and applies the results to R&D, crime, and the econometrics of peer effects.

JEL-codes: C72 D83 D85 H41 K42 O33 Z13 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.3.898
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (211)

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Related works:
Working Paper: Strategic Interaction and Networks (2014)
Working Paper: Strategic Interaction and Networks (2014)
Working Paper: Strategic Interaction and Networks (2010)
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