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Multi-activity influence and intervention

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  • Kor, Ryan
  • Zhou, Junjie

Abstract

Using a general network model with multiple activities, we analyse a planner's welfare maximising interventions taking into account within-activity network spillovers and cross-activity interdependence. We show that the direction of the optimal intervention, under sufficiently large budgets, critically depends on the spectral properties of two matrices: the first matrix depicts the social connections among agents, while the second one quantifies the strategic interdependence among different activities. In particular, the first principal component of the interdependence matrix determines budget resource allocation across different activities, while the first (last) principal component of the network matrix shapes the resource allocation across different agents when network effects are strategic complements (substitutes). We explore some comparative statics analysis with respective to model primitives and discuss several applications and extensions.

Suggested Citation

  • Kor, Ryan & Zhou, Junjie, 2023. "Multi-activity influence and intervention," Games and Economic Behavior, Elsevier, vol. 137(C), pages 91-115.
    • Handle: RePEc:eee:gamebe:v:137:y:2023:i:c:p:91-115
    DOI: 10.1016/j.geb.2022.11.007
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    References listed on IDEAS

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    More about this item

    Keywords

    Networks; Multiple activities; Interventions; Centralities;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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