Preliminary results from an agent-based adaptation of friendship games

This paper presents agent-based model (ABM) equivalents of friendshipbased games and compares the results with the theoretical models. A friendship game is a network game in which a player's immediate neighbors on the network are considered friends. Two friendship-based game models are examined: strategic complements and strategic substitutes. Strategic complements represent decisions for which it is preferable to do what one's friends are doing, such as adopting a common software product. Strategic substitutes represent decisions for which it is preferable to let one friend act alone, such as the local provision of a public good. The game theory models predict the rate of change of preferences and speci c equilibrium outcomes over speci c time scales for each model. The ABM equivalents provide a means to examine the motivations for behaviors of speci c individuals in these models beyond closed-form payo functions. The ABM results are found to be sensitive to the topology of the random network, and alternate topologies are examined in this respect. (JEL Q32)