Contagion and efficiency

Carlos Alós-Ferrer; Simon Weidenholzer

doi:10.1016/j.jet.2007.12.003

Contagion and efficiency

Carlos Alós-Ferrer, Simon Weidenholzer

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We consider a population of agents, either finite or countably infinite, located on an arbitrary network. Agents interact directly only with their immediate neighbors, but are able to observe the behavior of (some) other agents beyond their interaction neighborhood, and learn from that behavior by imitating successful actions. If interactions are not "too global" but information is fluid enough, we show that the efficient action is the only one which can spread contagiously to the whole population from an initially small, finite subgroup. This result holds even in the presence of an alternative, frac(1, 2)-dominant action.

Original language	English (US)
Pages (from-to)	251-274
Number of pages	24
Journal	Journal of Economic Theory
Volume	143
Issue number	1
DOIs	https://doi.org/10.1016/j.jet.2007.12.003
State	Published - Nov 2008

Keywords

Imitation
Learning
Local interaction games

ASJC Scopus subject areas

Economics and Econometrics

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10.1016/j.jet.2007.12.003

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title = "Contagion and efficiency",

abstract = "We consider a population of agents, either finite or countably infinite, located on an arbitrary network. Agents interact directly only with their immediate neighbors, but are able to observe the behavior of (some) other agents beyond their interaction neighborhood, and learn from that behavior by imitating successful actions. If interactions are not {"}too global{"} but information is fluid enough, we show that the efficient action is the only one which can spread contagiously to the whole population from an initially small, finite subgroup. This result holds even in the presence of an alternative, frac(1, 2)-dominant action.",

keywords = "Imitation, Learning, Local interaction games",

author = "Carlos Al{\'o}s-Ferrer and Simon Weidenholzer",

note = "Funding Information: We thank Sanjeev Goyal, Stephen Morris, Larry Samuelson, and an anonymous referee for helpful comments. Financial support from the Austrian Science Fund (FWF) under Project P18141-G09 is gratefully acknowledged.",

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AU - Alós-Ferrer, Carlos

AU - Weidenholzer, Simon

N1 - Funding Information: We thank Sanjeev Goyal, Stephen Morris, Larry Samuelson, and an anonymous referee for helpful comments. Financial support from the Austrian Science Fund (FWF) under Project P18141-G09 is gratefully acknowledged.

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Y1 - 2008/11

N2 - We consider a population of agents, either finite or countably infinite, located on an arbitrary network. Agents interact directly only with their immediate neighbors, but are able to observe the behavior of (some) other agents beyond their interaction neighborhood, and learn from that behavior by imitating successful actions. If interactions are not "too global" but information is fluid enough, we show that the efficient action is the only one which can spread contagiously to the whole population from an initially small, finite subgroup. This result holds even in the presence of an alternative, frac(1, 2)-dominant action.

AB - We consider a population of agents, either finite or countably infinite, located on an arbitrary network. Agents interact directly only with their immediate neighbors, but are able to observe the behavior of (some) other agents beyond their interaction neighborhood, and learn from that behavior by imitating successful actions. If interactions are not "too global" but information is fluid enough, we show that the efficient action is the only one which can spread contagiously to the whole population from an initially small, finite subgroup. This result holds even in the presence of an alternative, frac(1, 2)-dominant action.

KW - Imitation

KW - Learning

KW - Local interaction games

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Contagion and efficiency

Abstract

Keywords

ASJC Scopus subject areas

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