Optimal Equilibria of the Best Shot Game

Luca Dall'Asta, Paolo Pin and Abolfazl Ramezanpour

No 50684, Sustainable Development Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: We consider any network environment in which the “best shot game” is played. This is the case where the possible actions are only two for every node (0 and 1), and the best response for a node is 1 if and only if all her neighbors play 0. A natural application of the model is one in which the action 1 is the purchase of a good, which is locally a public good, in the sense that it will be available also to neighbors. This game will typically exhibit a great multiplicity of equilibria. Imagine a social planner whose scope is to find an optimal equilibrium, i.e. one in which the number of nodes playing 1 is minimal. To find such an equilibrium is a very hard task for any non-trivial network architecture. We propose an implementable mechanism that, in the limit of infinite time, reaches an optimal equilibrium, even if this equilibrium and even the network structure is unknown to the social planner.

Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers)
Pages: 17
Date: 2009
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Related works:
Journal Article: Optimal Equilibria of the Best Shot Game (2011)
Working Paper: Optimal Equilibria of the Best Shot Game (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemdp:50684

DOI: 10.22004/ag.econ.50684

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