# Equilibria, information and frustration in heterogeneous network games with conflicting preferences

## TL;DR

This paper explores how heterogeneous preferences and network topology influence equilibrium outcomes in social strategic interactions, using agent-based models and evolutionary dynamics, with implications for social efficiency and experimental validation.

## Contribution

It introduces a heterogeneous agent-based network model incorporating preferences and payoffs, extending analysis to new network types and dynamics, and compares predictions with experimental data.

## Key findings

- Some predicted equilibria do not appear with incomplete information.
- Network topology significantly affects equilibrium outcomes.
- Model aligns better with experimental results than standard economic theories.

## Abstract

Interactions between people are the basis on which the structure of our society arises as a complex system and, at the same time, are the starting point of any physical description of it. In the last few years, much theoretical research has addressed this issue by combining the physics of complex networks with a description of interactions in terms of evolutionary game theory. We here take this research a step further by introducing a most salient societal factor such as the individuals' preferences, a characteristic that is key to understand much of the social phenomenology these days. We consider a heterogeneous, agent-based model in which agents interact strategically with their neighbors but their preferences and payoffs for the possible actions differ. We study how such a heterogeneous network behaves under evolutionary dynamics and different strategic interactions, namely coordination games and best shot games. With this model we study the emergence of the equilibria predicted analytically in random graphs under best response dynamics, and we extend this test to unexplored contexts like proportional imitation and scale free networks. We show that some theoretically predicted equilibria do not arise in simulations with incomplete Information, and we demonstrate the importance of the graph topology and the payoff function parameters for some games. Finally, we discuss our results with available experimental evidence on coordination games, showing that our model agrees better with the experiment that standard economic theories, and draw hints as to how to maximize social efficiency in situations of conflicting preferences.