Continuous Social Networks

Abstract

We develop an extension of the classical model of DeGroot (1974) to a continuum of agents when they interact among them according to a DiKernel $W$. We show that, under some regularity assumptions, the continuous model is the limit case of the discrete one. We provide some applications of this result. First, we establish a canonical way to reduce the dimensionality of matrices by comparing matrices of different dimensions in the space of DiKernels. Then, we develop a model of Lobby Competition where two lobbies compete to bias the opinion of a continuum of agents. We give sufficient conditions for the existence of a Nash Equilibrium. Furthermore, we establish the conditions under which a Nash Equilibrium of the game induce an $\varepsilon$-Nash Equilibrium of the discretization of the game. Finally, we put forward some elements for the characterization of equilibrium strategies.