TY - JOUR
T1 - Supporting Others and the Evolution of Influence
AU - Perea y Monsuwé, A.
AU - Barbera, S.
PY - 2002/1/1
Y1 - 2002/1/1
N2 - In this paper we study environments in which agents can transfer influence to others by supporting them. When planning whom to support, they should take into account the future effect of this, since the receiving agent might use this influence to support others in the future. We show that in the presence of a finite horizon there is an essentially unique optimal support behavior which can be characterized in terms of associated marginal value functions. The analysis of these marginal value functions allows us to derive qualitative properties of optimal support strategies under different specific environments and to explicitly compute the optimal support behavior in some numerical examples. We also investigate the case of an infinite horizon. Examples show that multiple equilibria may appear in this setting, some of which sustaining a degree of cooperation that would not be possible under a finite horizon.
AB - In this paper we study environments in which agents can transfer influence to others by supporting them. When planning whom to support, they should take into account the future effect of this, since the receiving agent might use this influence to support others in the future. We show that in the presence of a finite horizon there is an essentially unique optimal support behavior which can be characterized in terms of associated marginal value functions. The analysis of these marginal value functions allows us to derive qualitative properties of optimal support strategies under different specific environments and to explicitly compute the optimal support behavior in some numerical examples. We also investigate the case of an infinite horizon. Examples show that multiple equilibria may appear in this setting, some of which sustaining a degree of cooperation that would not be possible under a finite horizon.
U2 - 10.1016/S0165-1889(01)00022-7
DO - 10.1016/S0165-1889(01)00022-7
M3 - Article
SN - 0165-1889
VL - 26
SP - 2051
EP - 2092
JO - Journal of Economic Dynamics & Control
JF - Journal of Economic Dynamics & Control
ER -