Independence and uniqueness of the mixed-strategy equilibrium in social networks

Part of : International journal of economic sciences and applied research ; Vol.6, No.3, 2013, pages 79-96

Issue:
Pages:
79-96
Author:
Abstract:
We develop topological analysis of social-network effect on game equilibrium in the context of two- player asymmetric normal-form games and also in evolutionary sense. Firstly, it is confirmed that the game equilibrium in many social networks cannot be established through that in a well-mixed population. In other words, we have proved the independence of the mixed-strategy equilibrium in social networks. Secondly, it is demonstrated that the game equilibrium exhibits injective property with respect to the corresponding social-network effect under consideration. That is, the uniqueness of the mixed-strategy game equilibrium in a given social network is identified. Thirdly, it is argued that uniqueness implies independence for a wide range of social networks and we have even derived the biggest sets of social networks in which independence and uniqueness hold true, respectively, in the underlying game. To sum up, we have provided qualitative characterizations about topological properties of the mixed-strategy game equilibrium in general social networks.
Subject:
Subject (LC):
Keywords:
social network, asymmetric game, mixed-strategy equilibrium, independence, uniqueness
Notes:
Περιέχει βιβλιογραφία
References (1):
  1. Acemoglu, D., Dahleh, M., Lobel, I. and Ozdaglar, A., 2011, ‘Bayesian Neaming in SocialNetworks’, Review of Economic Studies , 78, pp. 1201-1236.Acemoglu, D., Carvalho, V. M., Ozdaglar, A. and Tahbaz-Salehi, A., 2012, ‘The NetworkOrigins of Aggregate Fluctuations’, Econometrica, 80, pp. 1977-2016.Aliprantis, C. D., Camera, G. and Puzzello, D., 2007, ‘A Random Matching Theory’,Games and Economic Behavior, 59, pp. 1-16.Allen, B., Traulsen, A., Tamita, C. E. and Nowak, M. A., 2012, ‘How Mutation AffectsEvolutionary Games on Graphs’, Journal of Theoretical Biology, 299, pp. 97-105.Anderson, A. and Smith, L., 2010, ‘Dynamic Matching and Evolving Reputations’, ReviewofEconomic Studies, 77, pp. 3-29.Bala, V. and Goyal, S., 2000, ‘A Noncooperative Model of Network Formation’,Econometrica, 68 , pp. 1181-1229.Bandiera, O. and Rasul, I., 2006, ‘Social Networks and Technology Adoption in NorthernMozambique’, Economic Journal, 116, pp. 869-902.Bowles, S. and Gintis, H., 1998, ‘The Moral Economy of Communities: StructuredPopulations and the Evolution of Pro-Social Norms’, Evolution and Human Behavior,19,pp. 3-25.Citanna, A. and Siconolfi, R, 2010, ‘Recursive Equilibrium in Stochastic Overlapping-Generations Economies’, Econometrica, 78, pp. 309-347.Coase, R. H., 1988, ‘ The Firm, the Market and the Law', Chicago: University of ChicagoPress.Dai, D., and Cheng, Y., 2011, ‘Asymmetry and Endogenous Cooperation in Prisoners’Dilemma Game’, SSRN Working Paper.Dai, D., 2012, On the Existence of Pareto Optimal Endogenous Matching’, EconomicResearch Guardian, 2, pp. 201-224.Ellison, G., 1993, ‘Learning, Local Interaction, and Coordination’, Econometrica, 61, pp.1047-1071.Ellison, G., 1994, ‘Cooperation in the Prisoner's Dilemma with Anonymous RandomMatching’, Review of Economic Studies, 61, pp. 567-588.Fu, E, Nowak, M. A. and Hauert, C., 2010, ‘Invasion and Expansion of Cooperators inLattice Populations: Prisoner's Dilemma vs. Snowdrift Games’, Journal of TheoreticalBiology, 266, pp. 358-366.Fudenberg, D. and Kreps, D., 1993, ‘Learning Mixed Equilibria’, Games and EconomicBehavior, 5, pp. 320-367.Fudenberg, D. and Levine, D. K., 1993, ‘Steady State Learning and Nash Equilibrium ’,Econometrica, 61, pp. 547-573.Galeotti, A., Goyal, S. and Kamphorst, J., 2006, ‘Network Fonnation with HeterogeneousPlayers ’, Games and Economic Behavior, 54, pp. 353-372.Ghosh, P. and Ray, D., 1996, ‘Cooperation in Community Interaction without Information Flows ’, Review of Economic Studies, 63, pp. 491-519.Gilboa, I. and Matsui, A., 1992, ‘A Model of Random Matching’, Journal of MathematicalEconomics, 21, pp. 185-197.Golub, B. and Jackson, Μ. O., 2010, ‘Naïve Learning in Social Networks and the WisdomofCrowds’, American Economic Journal: Microeconomics, 2, pp. 112-149.Goyal, S., 2007, ‘Connections : an Introduction to the Economics of Networks', PrincetonUniversity Press, Princeton, New Jersey.Guillemin, V. and Pollack, A., 1974, ‘Differential Topology' , Prentice Hall Inc., New Jersey.Haag, M. and Lagunoff, R., 2006, ‘Social Norms, Local Interaction, and NeighborhoodPlanning’, International Economic Review, 47, pp. 265-296.Harsanyi, J., 1973, ‘Games with Randomly Disturbed Payoffs: ANew Rationale for Mixed-Strategy Equilibrium Points’, International Journal of Game Theory, 2, pp. 1-23.Hirsch, M. W., 1976, ‘Differential Topology', New York: Springer-Verlag.Hofbauer, J. and Hopkins, E., 2005, ‘Learning in Perturbed Asymmetric Games’, GamesandEconomic Behavior, 52, pp. 133-152.Hofbauer, J. and Sandholm, W. H., 2002, On the Global Convergence of StochasticFictitious Play’, Econometrica, 70, pp. 2265-2294.Hofbauer, J. and Sigmund, K., 2003, ‘Evolutionary Game Dynamics’, Bulletin of theAmerican Mathematical Society, 40, pp. 479-519.Horst, U. and Scheinkman, J. A., 2006, ‘Equilibria in Systems of Social Interactions’,Journal of Economic Theory, 130, pp. 44-77.Ivanov, I. and Dobreva, J., 2010, ‘Modeling Labor Supply through Duality and the SlutskyEquation’, International Journal of Economic Sciences and Applied Research, 3, 2, pp.111122.Jackson, M. O., 2008, ‘ Social and Economic Networks', Princeton, NJ: Princeton UniversityPress.Kandori, M., 1992, ‘Social Norms and Community Enforcement’, Review of EconomicStudies, 59, pp. 63-80.Kahneman, D., Knetsch, J. L. and Thaler, R., 1986, ‘Fairness as a Constraint on ProfitSeeking: Entitlements in the Market’, American Economic Review, 76, pp. 728-741.Marsden, J. E., Ratiu, T. and Abraham, R., 2001, ‘Manifolds , Tensor Analysis, andApplications',Third Edition, New York: Springer-Verlag.Mas-Colell, A. and Nachbar, J., 1991, On the Finiteness of the Number of Critical Equilibria,with an Application to Random Selections’, Journal of Mathematical Economics, 20,pp. 397-409.Maynard Smith, J., 1982, ‘Evolution and the Theory of Games', New York: CambridgeUniversity Press.Nowak, M. A., 2006, ‘Five Rules for the Evolution of Cooperation’, Science, 314, pp.1560-1563.Ohtsuki, H., Hauert, C., Lieberman, E. and Nowak, M. A., 2006, ‘A Simple Rule for theEvolution of Cooperation on Graphs and Social Networks ’, Nature, 441, pp. 502-505.Ohtsuki, H., Nowak, M. A. and Pacheco, J. M., 2007, ‘Breaking the Symmetry betweenInteraction and Replacement in Evolutionary Dynamics on Graphs’, Physical ReviewLetters, 98, pp. 108106.Okuno-Fujiwara, M. and Postlewaite, A., 1995, ‘Social Norms and Random MatchingGames’, Games and Economic Behavior, 9, pp. 79-109.Pacheco, J. M., Traulsen, A., Ohtsuki, H. and Nowak, M. A., 2008, ‘Repeated Games andDirect Reciprocity under Active Linking’, Journal of Theoretical Biology, 250, pp. 723-731.Pacheco, J. M., Traulsen, A. and Nowak, M. A., 2006, ‘Co-Evolution of Strategy andStructure in Complex Networks with Dynamical Linking’, Physical Review Letters, 97,pp.258103.Schelling, T., 1969, ‘Models of Segregation’, American Economic Review, 59, pp. 488-493.Schelling, T., 1971, ‘Dynamic Models of Segregation’, Journal of Mathematical Sociology,1,pp. 143-186.Skyrms, B. and Pemantle, R., 2000, ‘A Dynamic Model of Social Network Formation’,Proceedings of the National Academy of Sciences of the United States of America, 97,pp. 9340-9346.Spagnolo, G., 1999, ‘Social Relations and Cooperation in Organizations’, Journal ofEconomic Behavior and Organization, 38, pp. 1-25.Takahashi, S., 2010, ‘Community Enforcement when Players Observe Partners ’ Past Play’,Journalof Economic Theory, 145, pp. 42-62.Tamita, C. E., Ohtsuki, H., Antal, T., Fu, F. and Nowak, M. A., 2009, ‘Strategy Selection inStructured Populations’, Journal of Theoretical Biology, 259, pp. 570-581.Weibull, J., 1995, ‘Evolutionary Game Theory’, Cambridge, MA: The MIT Press.Zhang, J., 2004, ‘A Dynamic Model of Residential Segregation’, Journal of MathematicalSociology, 28, pp. 147-170.