Directed Networks with Spillovers*
نویسنده
چکیده
In this paper we examine the role played by different type of spillovers in network formation. More precisely, we study non-cooperative network formation in directed networks where the payoff of a player depends on the number of links she forms as well as, either on the total number of links formed by all other players, or the total number of links formed by her immediate neighbors. The first type of model is called the model with global spillovers while the second type is referred to as the local spillovers model. For both classes of games we investigate the existence of pure strategy Nash equilibria and characterize Nash networks under a number of different second order conditions on the payoff function. JEL Classification: C72, D85
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