Equilibrium characterization of networks under conflicting preferences

Penélope Hernández, Guillem Martínez-Cánovas, Manuel Munoz and Angel Sánchez

Economics Letters, 2017, vol. 155, issue C, 154-156

Abstract: In this work we characterize equilibrium introduced in configurations for networks with conflicting preferences. We use the model Hernández et al. (2013) to study the effect of three main factors: the strength of individual preferences, the level of integration in the network, and the intensity of conflict in the population. Our aim is to understand how likely is it that social outcomes are either those in which preferences dominate choices or those in which some individuals sacrifice their preferences to achieve consensus with others. Our results show that, the stronger individual preferences, the harder to achieve consensus in choices. However, in cases where the payoff ratio is less extreme, full coordination (consensus) is always an equilibrium. Finally, if the level of conflict is low, individual preferences become less relevant and all players choosing what they prefer is not an equilibrium anymore.

Keywords: Coordination games; Strategic complementarities; Consensus; Networks (search for similar items in EconPapers)
JEL-codes: C62 C72 D85 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:155:y:2017:i:c:p:154-156

DOI: 10.1016/j.econlet.2016.12.004

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