Network Games with Incomplete Information

Yves Zenou and Joan De Martí,
Authors registered in the RePEc Author Service: Joan de Martí Beltran

No 10290, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We consider a network game with strategic complementarities where the individual reward or the strength of interactions is only partially known by the agents. Players receive different correlated signals and they make inferences about other players' information. We demonstrate that there exists a unique Bayesian-Nash equilibrium. We characterize the equilibrium by disentangling the information effects from the network effects and show that the equilibrium effort of each agent is a weighted combinations of different Katz-Bonacich centralities where the decay factors are the eigenvalues of the information matrix while the weights are its eigenvectors. We then study the impact of incomplete information on a network policy which aim is to target the most relevant agents in the network (key players). Compared to the complete information case, we show that the optimal targeting may be very different.

Keywords: Bayesian games; Social Networks; Strategic complementarities; Key player policies (search for similar items in EconPapers)
JEL-codes: C72 D82 D85 (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-cta, nep-gth, nep-mic, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Network games with incomplete information (2015)
Working Paper: Network games with incomplete information (2015)
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