Abstract
We study game equilibria in a model of production and externalities in network with two types of agents who possess different productivities. Each agent may invest a part of her endowment (it may be, for instance, time or money) in the first of two time periods; consumption in the second period depends on her own investment and productivity as well as on the investments of her neighbors in the network. Three ways of agent’s behavior are possible: passive (no investment), active (a part of endowment is invested), and hyperactive (the whole endowment is invested). For star network with different productivities of agents in the center and in the periphery, we obtain conditions for existence of inner equilibrium (with all active agents) and study comparative statics. We introduce adjustment dynamics and study consequences of junction of two complete networks with different productivities of agents. In particular, we study how the behavior of nonadopters (passive agents) changes when they connect to adopters (active or hyperactive) agents.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Engineering Business Management
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
