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History as a coordination device

Argenziano, Rossella and Gilboa, Itzhak (2012) 'History as a coordination device.' Theory and Decision, 73 (4). 501 - 512. ISSN 0040-5833

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Abstract

Coordination games often have multiple equilibria. The selection of equilibrium raises the question of belief formation: how do players generate beliefs about the behavior of other players? This article takes the view that the answer lies in history, that is, in the outcomes of similar coordination games played in the past, possibly by other players. We analyze a simple model in which a large population plays a game that exhibits strategic complementarities. We assume a dynamic process that faces different populations with such games for randomly selected values of a parameter. We introduce a belief formation process that takes into account the history of similar games played in the past, not necessarily by the same population. We show that when history serves as a coordination device, the limit behavior depends on the way history unfolds, and cannot be determined from a-priori considerations.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 06 Mar 2013 14:36
Last Modified: 11 Apr 2019 11:15
URI: http://repository.essex.ac.uk/id/eprint/5742

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