Staudigl, Mathias and Weidenholzer, Simon (2014) Constrained interactions and social coordination. Journal of Economic Theory, 152 (1). pp. 41-63. DOI https://doi.org/10.1016/j.jet.2014.04.001
Staudigl, Mathias and Weidenholzer, Simon (2014) Constrained interactions and social coordination. Journal of Economic Theory, 152 (1). pp. 41-63. DOI https://doi.org/10.1016/j.jet.2014.04.001
Staudigl, Mathias and Weidenholzer, Simon (2014) Constrained interactions and social coordination. Journal of Economic Theory, 152 (1). pp. 41-63. DOI https://doi.org/10.1016/j.jet.2014.04.001
Abstract
We consider a co-evolutionary model of social coordination and network formation where agents may decide on an action in a 2 x 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 x m games, convex payoff functions, heterogeneous constraints, and frictions in link formation.
Item Type: | Article |
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Uncontrolled Keywords: | Coordination games; Equilibrium selection; Learning; Network formation |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 14 Jan 2015 15:49 |
Last Modified: | 30 Oct 2024 20:22 |
URI: | http://repository.essex.ac.uk/id/eprint/12316 |