Games Under Network Uncertainty

Promit K. Chaudhuri, Matthew Jackson, Sudipta Sarangi and Hector Tzavellas

Papers from arXiv.org

Abstract: We examine settings in which agents choose behaviors and care about their neighbors' behaviors, but have incomplete information about the network in which they are embedded. We develop a model in which agents use local knowledge of their direct (and in some cases indirect) connections to make inferences about the complementarity strength of their actions with other agents in the society. Consequently, an agent's position in the network and identity plays a crucial role in determining their strategic behavior in ways that we can quantify. Our main results characterize equilibrium behaviors under various beliefs. In particular, we analyze the role of heterogeneous network information among agents in detail. For instance, we show how having people update about the network can lead those with lower degree to systematically underestimate the complementarities in the society, while those with higher degree overestimate the complementarities. We also study the inferences that agents make and the resulting behaviors in several prominent families of network architectures.

Date: 2023-05, Revised 2024-12
New Economics Papers: this item is included in nep-des, nep-gth, nep-mic and nep-net
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