Jump to ContentJump to Main Navigation
Show Summary Details

The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan


IMPACT FACTOR increased in 2015: 0.412
5-year IMPACT FACTOR: 0.471

SCImago Journal Rank (SJR) 2015: 0.458
Source Normalized Impact per Paper (SNIP) 2015: 0.553
Impact per Publication (IPP) 2015: 0.329

Mathematical Citation Quotient (MCQ) 2015: 0.16

Online
ISSN
1935-1704
See all formats and pricing

 



Local Network Effects and Complex Network Structure

Arun Sundararajan1

1New York University,

Citation Information: The B.E. Journal of Theoretical Economics. Volume 7, Issue 1, ISSN (Online) 1935-1704, DOI: 10.2202/1935-1704.1319, January 2008

Publication History

Published Online:
2008-01-03

This paper presents a model of local network effects in which agents connected in a social network each value the adoption of a product by a heterogeneous subset of other agents in their neighborhood, and have incomplete information about the structure and strength of adoption complementarities between all other agents. I show that the symmetric Bayes-Nash equilibria of this network game are in monotone strategies, can be strictly Pareto-ranked based on a scalar neighbor-adoption probability value, and that the greatest such equilibrium is uniquely coalition-proof. Each Bayes-Nash equilibrium has a corresponding fulfilled-expectations equilibrium under which agents form local adoption expectations. Examples illustrate cases in which the social network is an instance of a Poisson random graph, when it is a complete graph, a standard model of network effects, and when it is a generalized random graph. A generating function describing the structure of networks of adopting agents is characterized as a function of the Bayes-Nash equilibrium they play, and empirical implications of this characterization are discussed.

Keywords: social networks; network science; network externalities; network goods; rational expectations; local information; complex network; small-world

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[1]
Marjolein J.W. Harmsen - van Hout, Benedict G.C. Dellaert, and P. Jean-Jacques Herings
European Journal of Operational Research, 2015
[2]
Pekka Sääskilahti
International Journal of the Economics of Business, 2015, Page 1
[3]
Kexin Zhao and Mu Xia
Journal of Management Information Systems, 2014, Volume 30, Number 4, Page 269

Comments (0)

Please log in or register to comment.