Networks, Markets, and Inequality: Comment

17 Pages Posted: 11 Feb 2019

See all articles by Zhigang Cao

Zhigang Cao

Beijing Jiaotong University - School of Economics and Management

Zhiwei Cui

Beihang University (BUAA)

Jin Zhang

University of International Business and Economics (UIBE)

Date Written: January 31, 2019

Abstract

Gagnon and Goyal (2017) develop an elegant network game model to explore the interaction between markets and networks, a central theme in social sciences. This comment corrects two technical mistakes of their paper. The first mistake is about a characterization of the maximal equilibrium in two interesting cases. We correct this mistake and provide a unified characterization. The second mistake is the missing of a crucial assumption on the independence of three basic ingredients of the model, without which several results of the comparative statics would be problematic. We also provide a more systematic comparative statics with the help of the theory of games with strategic complements.

Keywords: complelments, substitutes, network, market, games with strategic complements

JEL Classification: D63, D85, J15, L82, O15, Z13, Z31

Suggested Citation

Cao, Zhigang and Cui, Zhiwei and Zhang, Jin, Networks, Markets, and Inequality: Comment (January 31, 2019). Available at SSRN: https://ssrn.com/abstract=3326380 or http://dx.doi.org/10.2139/ssrn.3326380

Zhigang Cao

Beijing Jiaotong University - School of Economics and Management ( email )

China

Zhiwei Cui (Contact Author)

Beihang University (BUAA) ( email )

37 Xue Yuan Road
Beijing 100083
China

Jin Zhang

University of International Business and Economics (UIBE)

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

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