Dynamics of ideal efforts and consensus in a multi-layer network game

Abstract

We study a network game on a fixed multi-layer network of two types of relationships. The social interactions in the first layer carry a pressure to conform with the social norm within the layer. The second layer provides additional strategic complementarities from players’ interaction. Players are endowed with personal ideal efforts and are heterogeneous in their ideal efforts and productivity. Each player repeatedly chooses her effort level in the network game and updates her ideal effort based on the new effort choice. Each player suffers disutility when her effort differs from her neighbors’ efforts or is inconsistent with her ideal effort. We find the pure Nash equilibrium of the game in each period and provide conditions for the convergence of efforts and ideals to a steady state. Furthermore, we find that the sensitivity to cognitive dissonance and the taste for conformity have opposing effects on the speed of convergence to a consensus and the steady state.