​Economics Seminar | Networks, markets, and inequality 

Gagnon and Goyal (2017) develop an elegant network game model to explore the interaction between markets and networks, a central theme in social sciences. This comment corrects two technical mistakes of their paper. The first mistake is about a characterization of the maximal equilibrium in two interesting cases. We correct this mistake and provide a unified characterization. The second mistake is the missing of a crucial assumption on the independence of three basic ingredients of the model, without which several results of the comparative statics would be problematic. We also provide a more systematic comparative statics with the help of the theory of games with strategic complements. (Joint work with Zhiwei Cui and Jin Zhang)