A Noncooperative Model of Contest Network Formation
Résumé
In this paper we study a situation in which agents embedded in a network simultaneously play interrelated bilateral contest games with their neighbors. Spillovers between contests induce complex local and global network effects. We first characterize the equilibrium of the game on a given network. Then we study a network formation model, introducing a novel but intuitive link formation protocol. As links represent negative relationships, link formation is unilateral while link destruction is bilateral. The unique stable network topology is a complete K-partite network with partitions of different sizes. Stable networks exhibit properties that are in line with empirical and theoretical findings from other disciplines.
Domaines
Economies et finances
Origine :
Fichiers produits par l'(les) auteur(s)
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