A Variational Approach to Network Games

Emerson Melo
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Emerson Melo: Indiana University, Department of Economics

No 2018.05, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper studies strategic interaction in networks. We focus on games of strategic substitutes and strategic complements, and departing from previous literature, we do not assume particular functional forms on players' payoffs. By exploiting variational methods, we show that the uniqueness, the comparative statics, and the approximation of a Nash equilibrium are determined by a precise relationship between the lowest eigenvalue of the network, a measure of players' payoff concavity, and a parameter capturing the strength of the strategic interaction among players. We apply our framework to the study of aggregative network games, games of mixed interactions, and Bayesian network games.

Keywords: Network Games; Variational Inequalities; Lowest Eigenvalue; Shock Propagation (search for similar items in EconPapers)
JEL-codes: C61 C62 C72 D85 H41 (search for similar items in EconPapers)
Date: 2018-02
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-mic and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2018.05

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