Template-type: ReDIF-Paper 1.0
Author-Name: Opolot, Daniel
Author-Email: opolot@merit.unu.edu
Author-Workplace-Name: UNU-MERIT, University of Maastricht,
Title: Social interactions and complex networks
Abstract: This paper studies the impact of interaction topologies on individual 
	 and aggregate behavior in environments with social interactions. We 
	 study social interaction games of an infnitely large population with 
	 local and global externalities. Local externalities are limited within 
	 agents' ego-networks while the global externality is derived from 
	 aggregate distribution in a feedback manner. We consider two forms of 
	 heterogeneity, that due to individual intrinsic tastes and that due to 
	 ego-networks. The agents know the potential number of other agents they 
	 will interact with but do not posses complete information about their 
	 neighbors' types and strategies so they base their decisions on 
	 expectations and beliefs. We characterize the existence, uniqueness and 
	 multiplicity of equilibrium distribution of strategies. By considering 
	 arbitrary interaction topologies, we show that the interaction structure 
	 greatly determines the uniqueness and multiplicity of equilibrium 
	 outcomes, as well as the equilibrium aggregate distribution of 
	 strategies as measured by the mean strategy. 
Classification-JEL: C72, D82, D84, O33
Keywords: Complex networks, Partial information, Local externality, 
	 Global externality, Adoption
Series: UNU-MERIT Working Papers
Creation-Date: 2012
Number: 014
File-URL: http://www.merit.unu.edu/publications/wppdf/2012/wp2012-014.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2012014