Efficiency Loss in a Network Resource Allocation Game
Mathematics of Operations Research
Algorithmic Game Theory
Social and Economic Networks
Information sharing communities
WINE'07 Proceedings of the 3rd international conference on Internet and network economics
Contribution games in social networks
ESA'10 Proceedings of the 18th annual European conference on Algorithms: Part I
Optimal pricing in the presence of local network effects
WINE'10 Proceedings of the 6th international conference on Internet and network economics
Optimal Pricing in Networks with Externalities
Operations Research
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We consider a model of content contribution in peer-to-peer networks with linear quadratic payoffs and very general interaction patterns. We find that Nash equilibria of this game always exist; moreover, they are computable by solving a linear complementarity problem. The equilibrium is unique when goods are strategic complements or weak substitutes and contributions are proportional to a network centrality measure called the Bonacich index. In the case of public goods, the equilibrium is non-unique and characterized by k-order maximal independent sets. The structure of optimal networks is always star-like when the game exhibits strict or weak complements. Under public good scenarios, while star-like networks remain optimal in the best case, they also yield the worst-performing equilibria. We also discuss a network-based policy for improving the equilibrium performance of networks by the exclusion of a single player.