Network Design under Local Complementarities

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

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Abstract: We consider agents playing a linear network game with strategic complementarities. We analyse the problem of a policy maker who can change the structure of the network in order to increase the aggregate efforts of the individuals and/or the sum of their utilities, given that the number of links of the network has to remain fixed. We identify some link reallocations that guarantee an improvement of aggregate efforts and/or aggregate utilities. With this comparative statics exercise, we then prove that the networks maximising both aggregate outcomes (efforts and utilities) belong to the class of Nested-Split Graphs.

Keywords: Strategic Complementarity; Nested Split Graphs; Linear Interaction; Bonacich Centralities; Network (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-gth and nep-net
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Citations: View citations in EconPapers (9)

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Working Paper: Network Design under Local Complementarities (2013)
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