Constrained public goods in networks

Allouch, Nizar; King, Maia

doi:10.1111/jpet.12383

Cited by 19 publications

(6 citation statements)

References 39 publications

(47 reference statements)

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“…Finally, the results here are related to known results studying interactions within endogenously‐formed groups, especially those that relate to club formation. A series of papers studies equilibria in models of public goods provision in which benefits are restricted to a local network (see Allouch, 2015; Allouch & King, 2019; Bramoullé & Kranton, 2007). Related results in club theory analyze public goods provision via membership associations (see Buchanan, 1965), with Wooders (1978, 1980) introducing a general equilibrium framework.…”

Section: Introductionmentioning

confidence: 99%

A continuous model of strong and weak ties

Griffith

2022

J Public Economic Theory

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When individuals interact in a network, links are often asymmetric and of varying intensity. I study a model whereby networks emerge from agents maximizing utility from continuous linking decisions and self‐investment. The joint link surplus function allows arbitrary, bounded heterogeneity in the benefit to forming links. Under decreasing returns to scale in link surplus, the set of Nash equilibria is well‐behaved. In contrast, with constant or increasing returns to scale, heterogeneity and returns to self‐investment limit the set of Nash equilibria. This model rationalizes equilibrium networks in which individuals simultaneously hold ties that are asymmetric and of varying intensity.

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Section: Introductionmentioning

confidence: 99%

A continuous model of strong and weak ties

Griffith

2022

J Public Economic Theory

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“…We will do it for two economic models. First, we start with an asymmetric cooperative model of public goods provision in a network based on [5][6][7][8]. We will show that in this model players benefit from adding more links as links create positive externalities, and provide conditions guaranteeing the time consistency of a cooperative solution.…”

Section: Introductionmentioning

confidence: 99%

Characteristic Function and Time Consistency for Two-Stage Games with Network Externalities

Sedakov

2020

Mathematics

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Time consistency is a property of the solution to a cooperative dynamic game which guarantees that this solution remains stable with respect to its revision by players over time. The fulfillment of this property is directly related to the characteristic function and its behavior with the course of the game as any solution is based on this function. In this paper, we will examine the characteristic functions for two economic models with network externalities represented by a two-stage network game using the theory developed for this class of games. For a network game with positive externalities represented by a public goods provision model, we demonstrate a sufficient condition for time consistency. For a network game with negative externalities represented by a market competition model, we show that the cooperative solution is always time consistent.

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“…Galeotti, Golub and Goyal (2020) analyse optimal policy interventions informed by the eigenvalues of the underlying network of spillovers. Other recent and relevant contributions to the network literature include those by: Galeotti, Goyal, Jackson, Vega-Redondo and Yariv (2010); Ghiglino and Goyal (2010); Acemoglu, Malekian and Ozdaglar (2016); Bourlès, Bramoullé and Perez-Richet (2017); Kinateder and Merlino (2017); López-Pintado (2017); Chen, Zenou and Zhou (2018); Belhaj and Deroïan (2019); Elliott and Golub (2019); Allouch (2017); Allouch and King (2019) and Ushchev and Zenou (2020).…”

Section: Introductionmentioning

confidence: 99%

Welfare targeting in networks

Allouch

King

2020

Preprint

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This paper investigates welfare targeting for public goods in networks. First, we show that a tax/subsidy scheme (not necessarily budget-balanced) affects each consumer only insofar as it affects his neighbourhood. Second, we show that either a Pareto-improving income redistribution can be found or there exist Negishi weights, which we relate to the network structure. Third, in the case of Cobb–Douglas preferences, we show that a law of welfare targeting holds and links two well-known notions of the comparative statics of policy interventions: neutrality and welfare paradoxical effects. Collectively, our findings uncover the importance of the −1 eigenvalue to economic and social policy: it is an indication of how consumers absorb the impact of income redistribution.

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Constrained public goods in networks

Cited by 19 publications

References 39 publications

A continuous model of strong and weak ties

A continuous model of strong and weak ties

Characteristic Function and Time Consistency for Two-Stage Games with Network Externalities

Welfare targeting in networks

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