Clustering in network games

Sofía Ruiz-Palazuelos

Economics Letters, 2021, vol. 205, issue C

Abstract: In many circumstances, behavior and well-being of people depend on the actions taken by their social contacts. Previous research has mainly studied how individuals’ choices are shaped by their number of connections, while the incidence that other features of their social networks have on their behavior has been understudied. This paper analyzes the role of network clustering in Bayesian games of strategic substitutes and strategic complements played on networks, which reflect for instance public good provision and technology adoption, respectively. In our framework, players have incomplete information about the interaction network that includes the number of triads in the network — information labeled as perceived clustering throughout the paper. We show that equilibrium actions are non-decreasing (non-increasing) in perceived clustering under strategic substitutes (complements). Greater perceived clustering thus increases public good provision and reduces the adoption of complementary technologies in the Bayesian equilibria.

Keywords: Networks; Network games; Clustering; Incomplete information; Network closure; Graphical games (search for similar items in EconPapers)
JEL-codes: C70 D84 D85 Z13 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176521001993
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecolet:v:205:y:2021:i:c:s0165176521001993

DOI: 10.1016/j.econlet.2021.109922

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().