2011

Social Interactions and Spillovers

Reprint No. 2011:20

Author(s): Antonio Cabrales, Antoni Calvó-Armengol and Yves ZenouYear: 2011 Title: Games and Economic Behavior Volume (No.): 72 (2) Pages: 339–360
Online article (restrictions may apply)


The aim of this paper is to provide a tractable model where both socialization (or network formation) and productive efforts can be analyzed simultaneously. This permits a fullfledged
equilibrium/welfare analysis of network formation with endogenous productive efforts and heterogeneous agents. We show that there exist two stable interior equilibria, which we can Pareto rank. The socially efficient outcome lies between these two equilibria. When the intrinsic returns to production and socialization increase, all equilibrium actions decrease at the Pareto-superior equilibrium, while they increase at the Pareto-inferior equilibrium. In both cases, the percentage change in socialization effort is higher (in absolute value) than that of the productive effort.


Reference:
Cabrales, Antonio, Antoni Calvó-Armengol and Yves Zenou (2011), "Social Interactions and Spillovers". Games and Economic Behavior 72(2), 339–360.

Interdisciplinary European Studies

The European Union and the Return of the Nation State

9783030350048_200x_the-european-union-and-the-return-of-the-nation-state.jpg

This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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