Existence of Nash Networks and Partner Heterogeneity

GATE Working Paper No. 1111

Posted: 9 Mar 2011

See all articles by Pascal Billand

Pascal Billand

Jean Monnet University

Christophe Bravard

Jean Monnet University, Saint-Etienne - CREUSET

Sudipta Sarangi

Virginia Polytechnic Institute & State University

Date Written: March 2011

Abstract

In this paper, we pursue the work of H. Haller and al. (2005, [10]) and examine the existence of equilibrium networks, called Nash networks, in the noncooperative two-way flow model (Bala and Goyal, 2000, [1]) 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, D85

Suggested Citation

Billand, Pascal and Bravard, Christophe and Sarangi, Sudipta, Existence of Nash Networks and Partner Heterogeneity (March 2011). GATE Working Paper No. 1111, Available at SSRN: https://ssrn.com/abstract=1780904 or http://dx.doi.org/10.2139/ssrn.1780904

Pascal Billand (Contact Author)

Jean Monnet University ( email )

34, rue Francis Baulier
Saint-Etienne, 42023
France

Christophe Bravard

Jean Monnet University, Saint-Etienne - CREUSET ( email )

34, rue Francis Baulier
Saint-Etienne, 42023
France

Sudipta Sarangi

Virginia Polytechnic Institute & State University ( email )

250 Drillfield Drive
Blacksburg, VA 24061
United States

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