Invited Session Mon.1.MA 043

Monday, 10:30 - 12:00 h, Room: MA 043

Cluster 8: Game theory [...]

Games in networks

 

Chair: Konstantinos Bimpikis

 

 

Monday, 11:00 - 11:25 h, Room: MA 043, Talk 2

Matthew Elliott
A network centrality approach to coalitional stability

Coauthor: Ben Golub

 

Abstract:
We study games in which each player simultaneously exerts costly effort that provides different benefits to some of the other players. The goal is to find and describe effort profiles that are immune to coordinated coalitional deviations when such a game is played repeatedly. Formally, these effort profiles are the ones that can be sustained in a strong Nash equilibrium of the repeated game.

First we show, under some assumptions (mainly concavity of utility functions), that an effort profile is Pareto efficient if and only if the spectral radius of an induced 'benefits' matrix is one. This 'benefits' matrix is a function of the action profile and measures the marginal benefits each agent can confer on each other per unit of marginal cost they incur. Our second result shows that if the right eigenvector of the benefits matrix also corresponds to the action profile, then the action profile is sustainable in a coalitionally robust equilibrium of the repeated game. These results are obtained without parametric assumptions, using the theory of general equilibrium and its relation to the core, along with the Perron-Frobenius spectral theory of nonnegative matrices.

 

 

Monday, 11:30 - 11:55 h, Room: MA 043, Talk 3

Konstantinos Bimpikis
Competitive marketing strategies over social networks

Coauthors: Asuman Ozdaglar, Ercan Yildiz

 

Abstract:
Recent advances in information technology have allowed firms to gather vast amounts of data regarding consumers' preferences and the structure and intensity of their social interactions. This paper examines a game-theoretic model of competition between firms, which can target their marketing budgets to individuals embedded in a social network. We provide a sharp characterization of the optimal targeted marketing strategies and highlight their dependence on the consumers' preferences as well as on the underlying social network structure. In particular, firms find it optimal to allocate their marketing budgets to consumers in proportion to their "network centrality'', a measure of social influence. Moreover, we identify network structures for which targeted advertising is more beneficial for the firms and, finally, we show how the difference in the initial budgets affect the outcome of the marketing competition between the firms.

 

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