Existence of Nash Networks and Partner Heterogeneity
Jean Monnet University
Jean Monnet University, Saint-Etienne - CREUSET
Louisiana State University, Baton Rouge - Department of Economics
GATE Working Paper No. 1111
In this paper, we pursue the work of H. Haller and al. (2005, ) and examine the existence of equilibrium networks, called Nash networks, in the noncooperative two-way flow model (Bala and Goyal, 2000, ) with partner heterogeneous agents. We show through an example that Nash networks do not always exist in such a context. We then restrict the payoff function, in order to find conditions under which Nash networks always exist. We give two properties: increasing differences and convexity in the first argument of the payoff function, that ensure the existence of Nash networks. It is worth noting that linear payoff functions satisfy the previous properties.
Keywords: Nash networks, two-way ﬂow models, partner heterogeneity
JEL Classification: C72, D85working papers series
Date posted: March 9, 2011
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.343 seconds