Abstract
We consider partial bandwagon properties in the context of coordination games to capture the idea of weak network externalities. We then study a local interactions model where agents play a coordination game following a noisy best-reply process. We show that globally pairwise risk dominant strategies are selected in arbitrary 3 × 3 coordination games, but not necessarily in larger games. A comparison with the global interactions benchmark shows that the nature of interactions might alter the long-run results themselves, and not only the speed of convergence. We also illustrate that the simultaneous coexistence of conventions is possible for games with at least 5 strategies.
Original language | English (US) |
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Pages (from-to) | 179-197 |
Number of pages | 19 |
Journal | Games and Economic Behavior |
Volume | 61 |
Issue number | 2 |
DOIs | |
State | Published - Nov 2007 |
Keywords
- Bandwagon properties
- Coordination games
- Learning
- Local interactions
- Mutation
ASJC Scopus subject areas
- Finance
- Economics and Econometrics