2023/02/12 by Benjamin Golub, Golub, Benjamin, Yu-Chi Hsieh +3
Decision Sciences · Economics, Econometrics and Finance · Social Sciences · #Economic theories and models #Experimental Behavioral Economics Studies #FOS: Computer and information sciences #FOS: Economics and business #Game Theory and Applications #Social and Information Networks (cs.SI) #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2302.05831
openalex publication_date 2023/02/12 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Bolletta (2021, Math. Soc. Sci. 114:1-10) studies a model in which a network is strategically formed and then agents play a linear best-response investment game in it. The model is motivated by an application in which people choose both their study partners and their levels of educational effort. Agents have different one-dimensional types \unicodex2013 private returns to effort. A main result claims that pairwise Nash stable networks have a locally complete structure consisting of possibly overlapping cliques: if two agents are linked, they are part of a clique composed of all agents with types between theirs. We offer a counterexample showing that the claimed characterization is incorrect, highlight where the analysis errs, and discuss implications for network formation models.