Regime change in large information networks
Milán, Pau (Universitat Autònoma de Barcelona)
de Martí, Joan (Universitat Pompeu Fabra)

Imprint:	Barcelona: GSE Working Paper; 2018
Description:	44 pàg.
Abstract:	We study global games of regime change within networks of truthful communication. Agents can choose between attacking and not attacking a status quo, whose strength is unknown. Players share private signals on this state of the world with their immediate neighbors. Communication with neighboring players introduces local correlations in posterior beliefs and also allows for the pooling of information. In order to isolate the latter effect, we provide, as a methodological contribution, sparseness conditions on networks that allow for asymptotic approximations that eliminate covariances from equilibrium strategies. We ask how changes in the distribution of connectivities in the population affect the types of coordination in equilibrium as well as the likelihood of successful rally. We find that without a public signal strategic incentives align, and the probability of success remains independent of the type of network. With a public signal the distribution of degrees unambiguously affects the probability of success, although the direction of change is not monotone, and depends crucially on the cost of attack.
Grants:	Ministerio de Educación y Ciencia SEJ2006-09993 Agencia Estatal de Investigación ECO2011-28965 Ministerio de Economía y Competitividad SEV-2015-0563 European Commission 324048 Generalitat de Catalunya 2009 BP-A 00116
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Language:	Anglès
Series:	GSE working paper; 1049
Document:	Working paper ; recerca ; Versió publicada
Published in:	GSE Barcelona Graduate School of Economics Working Papers, Nº 1049 (2018)

Adreça alternativa: https://bse.eu/research/working-papers/regime-change-large-information-networks

44 p, 1.9 MB

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Research literature > Working papers