Provision of Public Goods on Networks: On Existence, Uniqueness, and Centralities

Abstract: We consider the provision of public goods on networks of strategic agents. We study different effort outcomes of these network games, namely, the Nash equilibria, Pareto efficient effort profiles, and semi-cooperative equilibria (effort profiles resulting from interactions among coalitions of agents). We identify necessary and sufficient conditions on the structure of the network for the uniqueness of the Nash equilibrium. We show that our finding unifies (and strengthens) existing results in the literature. We also identify conditions for the existence of Nash equilibria for the subclasses of games at the two extremes of our model, namely games of strategic complements and games of strategic substitutes. We provide a graph-theoretical interpretation of agents' efforts at the Nash equilibrium, as well as the Pareto efficient outcomes and semi-cooperative equilibria, by linking an agent's decision to her centrality in the interaction network. Using this connection, we separate the effects of incoming and outgoing edges on agents' efforts and uncover an alternating effect over walks of different length in the network.