Efficient networks in games with local complementarities

Mohamed Belhaj (), Sebastian Bervoets and Frédéric Deroïan ()

Theoretical Economics, 2016, vol. 11, issue 1

Abstract: We address the problem of a planner looking for the efficient network when agents play a network game with local complementarities and links are costly. We show that for general network cost functions, efficient networks belong to the class of Nested-Split Graphs. Next, we refine our results and find that, depending on the specification of the network cost function, complete networks, core-periphery networks, dominant group architectures, quasi-star and quasi-complete networks can be efficient.

Keywords: Network games; strategic complementarity; nested split graphs (search for similar items in EconPapers)
JEL-codes: C72 D85 (search for similar items in EconPapers)
Date: 2016-01-30
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Citations: View citations in EconPapers (35)

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