UNSPECIFIED (2014) 'Constrained interactions and social coordination.' Journal of Economic Theory, 152 (1). 41 - 63. ISSN 0022-0531

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Abstract

We consider a co-evolutionary model of social coordination and network formation where agents may decide on an action in a 2. ×. 2-coordination game and on whom to establish costly links to. We find that if agents may only support a limited number of links payoff dominant conventions will emerge in the long run, contrasting the case of unconstrained interactions where risk dominant conventions arise for a wide range of parameters. Under constrained iterations, already a small number of agents choosing the payoff dominant action enables agents - by linking up to those agents and choosing the payoff dominant action - to secure themselves the highest possible payoff. We extend our model by discussing constrained interactions in the context of general m×. m games, convex payoff functions, heterogeneous constraints, and frictions in link formation. © 2014 Elsevier Inc.

Item Type:	Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics, Department of
Depositing User:	Jim Jamieson
Date Deposited:	14 Jan 2015 15:49
Last Modified:	10 Jan 2019 15:19
URI:	http://repository.essex.ac.uk/id/eprint/12316

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