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Abstract. We study and compare two frameworks: a model of influence, and command games. In the influence model, in which players are to make a certain acceptance/rejection decision, due to influence of other players, the decision of a player may be different from his inclination. We study a relation between two central concepts of this model: influence function, and follower function. We deliver sufficient and necessary conditions for a function to be a follower function, and we describe the structure of the set of all influence functions that lead to a given follower function. In the command structure introduced by Hu and Shapley, for each player a simple game called the command game is built. One of the central concepts of this model is the concept of command function. We deliver sufficient and necessary conditions for a function to be a command function, and describe the minimal sets generating a normal command game. We also study the relation between command games and influence functions. A sufficient and necessary condition for the equivalence between an influence function and a normal command game is delivered. JEL Classification: C7, D7

This paper presents a unified framework to study the co-evolution of networks and play, using the language of evolutionary game theory. We show by examples that the set-up is rich enough to encompass many recent models discussed by the literature. We completely characterize the invariant distribution of such processes and show how to calculate stochastically stable states by means of a tree-characterization algorithm. Moreover, specializing the process a bit further allows us to completely characterize the generated random graph ensemble. This new result demonstrates a new and rather general relation between random graph theory and evolutionary models with endogenous interaction structures.

We present a model of social interaction in which actors choose their partners and play the Chicken Game with them. In contrast to most previous models of the coevolution of games and networks, we assume that the actors can employ different actions against dif-ferent partners. This allows us to derive two different solutions to the coordination and asymmetry problems in the game: egalitarian stationary conventions (based on indirect reciprocity at the network level) and alternating conventions (based on direct reciprocity in dyads). We derive predictions on the occurrence of the possible convention structures and test our theoretical findings in a computerized experiment. The experimental results indicate that the egalitarian conventions indeed emerge and persist and that the alter-nating conventions are much more likely than the stationary ones. However, although egalitarian in terms of payoffs, the convention structures tend to have hierarchical action distributions.

Abstract Some institutional transitions are implemented as the deliberate outcome of bargaining among a small number of groups, but many are more decentralized, with a large number of private actors informally adopting new practices that are later confirmed by changes in formal governance structures. For example, land tenure norms, changes in conventional crop shares, shifts in inheritance practices, and traditional property rights all are informal institutions, or conventions, that persist for long periods of time and sometimes experience rapid changes in the absence of government policies. To capture these informal and decentralized aspects of institutional persistence and change, we study transitions between conventional contracts among members of two classes. The driving mechanism in our model comes from intentional deviance from conventions by individuals, leading to some contracts being selected over others in the long-run. Transitions between contractual conventions occur when sufficiently many individuals deviate from (rather than conform to) the status quo convention. We identify conditions under which efficient and/or egalitarian contractual conventions are likely to be long-run stable equilibria under a stochastic evolutionary dynamic. We endogenize the population sizes of the two classes and obtain conditions under which barriers to intergenerational mobility increase the probability of unequal insitutions. We also let the rate of deviation from the status quo convention vary with the degree of inequality and group network structure. Finally, we introduce a government motivated to support the long-term interest of one of the groups, and identify the conditions under which it will adopt redistributive strategies.

This papers studies the co-evolution of networks and play in the context of finite population potential games. Action revision, link creation and link destruction are combined in a continuous-time Markov process. I derive the unique invariant distribution of this process in closed form, as well as the marginal distribution over action profiles and the conditional distribution over networks. It is shown that the equilibrium interaction topology is an inhomogeneous random graph. Furthermore, a characterization of the set of stochastically stable states is provided, generalizing existing results to models with endogenous interaction structures.

I develop a model of financial sector in which endogenous intermediation among debt financed banks generates excessive systemic risk. The central idea is to explore the possibility that certain financial institutions are able to use their lending and borrowing decisions to tilt the division of surplus in their own favor through capturing intermediation spreads, even if the implied change in the structure of financial system hurts the total surplus of the economy. The paper predicts that there is excessive connection among banks who make risky investments and too little connection among those who mainly provide funding. Inefficiency arises because the financial institutions who intermediate among other institutions are exposed to excessive counterparty risk: replacing them with certain other banks mitigates the extent of failure when it is inevitable without hurting the optimal level of investment. In equilibrium, intermediators choose to over expose themselves to other risky banks and suffer the cost of failure due to contagion if they absorb enough rents when they survive.

We consider homogeneous two-sided markets, in which connected buyer-seller pairs bargain and trade repeatedly. In this infinite market game with exogenous matching probabilities and a common discount factor, we prove the existence of equilibria in stationary strategies. The equilibrium payoffs are given implicitly as a solution to a system of linear equations. Then, we endogenize the matching mechanism in a link formation stage that precedes the market game. When agents are sufficiently patient and link costs are low, we provide an algorithm to construct minimally connected networks that are pairwise stable with respect to the expected payoffs in the trading stage. The constructed networks are essentially efficient and consist of components with a constant buyer-seller ratio. The latter ratio increases (decreases) for a buyer (seller) that deletes one of her links in a pairwise stable component.

would like to thank Luc Bissonnette for his precious help and suggestions. I also would like to thank Yann