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Social Interactions In Large Networks: A Game Theoretic Approach

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  • Haiqing Xu

Abstract

This article studies estimation of social interactions in a large network game, where all observations come from one single equilibrium of a network game with asymmetric information. Simple assumptions about the structure are made to establish the existence and uniqueness of the equilibrium. I show that the equilibrium strategies satisfy a network decaying dependence condition requiring that dependence between two players' decisions decay with their network distance, which serves as the basis for my statistical inference. Moreover, I establish identification and propose a computationally feasible and efficient estimation method, which is illustrated by an empirical application of college attendance.

Suggested Citation

  • Haiqing Xu, 2018. "Social Interactions In Large Networks: A Game Theoretic Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(1), pages 257-284, February.
    • Handle: RePEc:wly:iecrev:v:59:y:2018:i:1:p:257-284
    DOI: 10.1111/iere.12269
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    Citations

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    Cited by:

    1. Daiqiang Zhang, 2021. "Testing Passive Versus Symmetric Beliefs In Contracting With Externalities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(2), pages 723-767, May.
    2. Michael P. Leung, 2024. "Causal Interpretation of Estimands Defined by Exposure Mappings," Papers 2403.08183, arXiv.org, revised Mar 2024.
    3. Balbus, Lukasz & Dziewulski, Pawel & Reffett, Kevin & Wozny, Lukasz, 2022. "Markov distributional equilibrium dynamics in games with complementarities and no aggregate risk," Theoretical Economics, Econometric Society, vol. 17(2), May.
    4. Michael P. Leung, 2019. "Inference in Models of Discrete Choice with Social Interactions Using Network Data," Papers 1911.07106, arXiv.org.
    5. Chen, Liang & Luo, Yao, 2023. "Empirical analysis of network effects in nonlinear pricing data," International Journal of Industrial Organization, Elsevier, vol. 91(C).
    6. Andrey Leonidov, 2024. "Potts game on graphs: static equilibria," Computational Management Science, Springer, vol. 21(1), pages 1-10, June.
    7. Kojevnikov, Denis & Song, Kyungchul, 2023. "Econometric inference on a large Bayesian game with heterogeneous beliefs," Journal of Econometrics, Elsevier, vol. 237(1).
    8. González, Felipe, 2020. "Collective action in networks: Evidence from the Chilean student movement," Journal of Public Economics, Elsevier, vol. 188(C).
    9. Lin, Zhongjian & Tang, Xun & Yu, Ning Neil, 2021. "Uncovering heterogeneous social effects in binary choices," Journal of Econometrics, Elsevier, vol. 222(2), pages 959-973.
    10. John Higgins & Tarun Sabarwal, 2023. "Control and spread of contagion in networks with global effects," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(6), pages 1149-1187, December.
    11. John Higgins & Tarun Sabarwal, 2021. "Control and Spread of Contagion in Networks," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202201, University of Kansas, Department of Economics, revised Jan 2022.
    12. Kojevnikov, Denis & Song, Kyungchul, 2023. "Econometric inference on a large bayesian game with heterogeneous beliefs," Other publications TiSEM aca0631e-4f8a-45c7-af3a-4, Tilburg University, School of Economics and Management.
    13. Lin, Zhongjian & Hu, Yingyao, 2024. "Binary choice with misclassification and social interactions, with an application to peer effects in attitude," Journal of Econometrics, Elsevier, vol. 238(1).
    14. Aristide Houndetoungan, 2024. "Count Data Models with Heterogeneous Peer Effects under Rational Expectations," Papers 2405.17290, arXiv.org.
    15. Bora Kim, 2020. "Analysis of Randomized Experiments with Network Interference and Noncompliance," Papers 2012.13710, arXiv.org.
    16. Emerson Melo, 2022. "On the uniqueness of quantal response equilibria and its application to network games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(3), pages 681-725, October.
    17. Michael P. Leung, 2020. "Equilibrium computation in discrete network games," Quantitative Economics, Econometric Society, vol. 11(4), pages 1325-1347, November.
    18. Zhongjian Lin & Francis Vella, 2024. "Endogenous Treatment Models with Social Interactions: An Application to the Impact of Exercise on Self-Esteem," Papers 2408.13971, arXiv.org.
    19. Lin, Zhongjian & Vella, Francis, 2021. "Selection and Endogenous Treatment Models with Social Interactions: An Application to the Impact of Exercise on Self-Esteem," IZA Discussion Papers 14167, Institute of Labor Economics (IZA).
    20. Liang Chen & Yao Luo, 2023. "Empirical Analysis of Network Effects in Nonlinear Pricing Data," Working Papers tecipa-758, University of Toronto, Department of Economics.
    21. Leung, Michael P., 2019. "A weak law for moments of pairwise stable networks," Journal of Econometrics, Elsevier, vol. 210(2), pages 310-326.

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