Networks Workshop - Ruohan Qin (Cambridge)

Title: The Dark Force of Economics: Attack, Defend and Produce

Abstract:

This paper investigates the effects of networks on player behaviour and conflict outcomes
in networked conflict. It develops a two-stage networked production and conflict model
where agents allocate resources among attack, defence, and production. In equilibrium, a
high-degree player has higher incentive to defend and thus suffers less attack from every
neighbour than a low-degree player. The equilibrium utility of any player is increasing in
her own degree and decreasing in the degrees of her neighbours up to a boundary point.
Surprisingly, an increase in potential conflict relations within the network could lead to more
peaceful outcomes by incentivising more defence. This counter-intuitive insight suggests
that adding links (potential conflict relations) to the conflict network can sometimes be more
effective than deletion in reducing attack intensity.