Abstract
We consider a network model where individuals exert efforts in two types of activities that are interdependent. These activities can be either substitutes or complements. We provide a full characterization of the Nash equilibrium of this game for any network structure. We show, in particular, that quadratic games with linear best- reply functions aggregate nicely to multiple activities because equilibrium efforts obey similar formulas to that of the one- activity case. We then derive some comparative-statics results showing how own productivity affects equilibrium efforts and how network density impacts equilibrium outcomes.
Original language | English |
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Pages (from-to) | 34-85 |
Number of pages | 52 |
Journal | American Economic Journal: Microeconomics |
Volume | 10 |
Issue number | 3 |
DOIs | |
Publication status | Published - Aug 2018 |