Game Equilibria and Transition Dynamics in Triregular Networks

Abstract

We study game equilibria in a model of production and externalities in regular network with three types of agents who possess different productivities. Each agent may invest a part of her endowment (for instance, time or money) at the first stage; consumption at the second stage depends on her own investment and productivity as well as on the investments of her neighbors in the network. We introduce adjustment dynamics described by differential equations. We study which equilibria are possible, and which of these equilidria are dynamically stable under different combinations of parameters of the game.