Recently, Professor Meng Dawen from the Department of Microeconomics, School of Economics, Shanghai University of Finance and Economics, has had his sole-authored paper Targeting Network Intervention with Social Norm published online in Journal of Economic Theory (JET), a top-tier international economics journal.
This paper introduces social norms into network games with local averages. It derives the spectral decomposition of optimal interventions, characterizes limiting interventions under extremely large and minimal budgets, and obtains the lower bound of the budget that guarantees a specified small estimation error. It further proposes a mean-variance intervention switching rule under incomplete information. For practical applications, limited resources can be allocated to key nodes in a targeted manner: precise allocation under small budgets and balanced support under abundant budgets. It provides quantitative foundations and operational tools to answer “where funds can be spent most efficiently” for public policies, platform governance, community norms, public health and education outreach.
Abstract
This paper discusses a network game in a local-average setup, where players' payoffs depend on the social norms they confront. I focus on an optimal targeting intervention problem, where a planner aims to maximize social welfare by altering individual characteristics ex ante. First, I decompose orthogonally the optimal intervention into the eigenspaces of the social welfare matrix. In what follows, I present the limit forms of the optimal intervention as the budget approaches infinity or zero. I then identify the errors arising from approximating the optimal intervention with its various limit forms. Finally, this paper explores the intervention problem under incomplete information, where the planner switches from mean to variance intervention based on the comparison of their unit costs and the aggregate budget size.
About the Author
Meng Dawen is a Professor at the School of Economics, Shanghai University of Finance and Economics. His main research fields include microeconomic theory, game theory and information economics. His research papers have been published in renowned Chinese and English journals such as Journal of Economic Theory, Games and Economic Behavior (2 papers), Economic Theory, Review of Economic Design, China Economic Quarterly (2 papers) and China Industrial Economics. He has presided over two projects funded by the National Natural Science Foundation of China and one Humanities and Social Science project of the Ministry of Education. He has received numerous academic awards including the Second Prize of the 17th Shanghai Philosophy and Social Sciences Outstanding Achievements Award and the 2020 Outstanding Achievement Award from the China Information Economics Society.
The School of Economics at Shanghai University of Finance and Economics consistently regards research and innovation capacity as a vital component of core disciplinary competitiveness. Faculty research teams in the school hold themselves to high standards for first-class discipline construction, engage in active exploration and bold innovation, leverage the outcomes of the school’s ongoing educational reforms, steadily develop international research agendas rooted in China’s national conditions, and advance research on frontier issues to contribute to the school’s academic progress and disciplinary development.
