Networks of Many Public Goods with Non-Linear Best Replies
31 Pages Posted: 17 Jun 2015
Date Written: June 17, 2015
We model a bipartite network in which links connect agents with public goods. Agents play a voluntary contribution game in which they decide how much to contribute to each public good they are connected to. We show that the problem of finding a Nash equilibrium can be posed as a non-linear complementarity one. The existence of an equilibrium point is established for a wide class of individual preferences. We then find a simple sufficient condition, on network structure only, that guarantees the uniqueness of the equilibria, and provide an easy procedure for building networks that respects this condition.
Keywords: Bipartite Graph, Public Good, Nash Equilibrium, Non-Linear, Complementarity Problem
JEL Classification: C72, D85, H41
Suggested Citation: Suggested Citation