Local Spillovers, Convexity and the Strategic Substitutes Property in Networks
GATE Working Paper No. 1110
20 Pages Posted: 9 Mar 2011
Date Written: March 1, 2011
We provide existence results in a game with local spillovers where the payoff function satisfies both convexity and the strategic substitutes property. We show that there always exists a stable pairwise network in this game, and provide a condition which ensures the existence of pairwise equilibrium networks. Moreover, our existence proof allows us to characterize a pairwise equilibrium of these networks.
Keywords: networks, existence, spillovers
JEL Classification: C70, D85
Suggested Citation: Suggested Citation