Risk compensation can undermine the ability of partially-effective vaccines to curb infectious-disease epidemics: Vaccinated agents may optimally choose to engage in more risky interactions and, as a result, may increase everyone's infection probability. We show that — in contrast to the...

We study a model of network externalities transmitted over links wherein the externalities stem from links themselves rather than nodes. For example, bilateral investments can fail and trigger cascading defaults of firms. Joint research projects can succeed and innovations can be diffused over...

This concise textbook presents students with all they need for advancing in mathematical economics. Detailed yet student-friendly, Vohra's book contains chapters in, amongst others:* Feasibility * Convex Sets * Linear and Non-linear Programming* Lattices and Supermodularity.Higher level...

Under full substitutability of preferences, it is known that a competitive equilibrium exists in trading networks, and is equivalent to (chain) stable outcomes. In this paper, we formulate the problem of finding an efficient outcome as a generalized submodular flow problem on a suitable network....

Diversified cross-shareholding networks are thought to be more resilient to shocks, but diversification also increases the channels by which a shock can spread. To resolve these competing intuitions we introduce a stochastic model of a diversified cross-shareholding network in which a firm’s...