Learning and equilibrium selection in a coordination game with heterogeneous agents

Alberto Fogale, Paolo Pellizzari and Massimo Warglien

Physica A: Statistical Mechanics and its Applications, 2007, vol. 380, issue C, 519-527

Abstract: We study a modified version of the coordination game presented in [J. van Huyck, J. Cook, R. Battalio, Selection dynamics, asymptotic stability, and adaptive behavior, J. Polit. Econ. 102 (1994) 975–1005], where a representative selection dynamics was proposed to explain experimental data. Assuming that the agents adjust their moves in the direction of the best response, we derive a formal analysis of the stability of the equilibria. We show by simulation that the interior equilibrium is robustly reached even when considerable heterogeneity is allowed among the agents. Our truly multi-agent game is capable of approximating quite well both the “median” game convergence and the experimental data.

Keywords: Coordination games; Selection dynamics; Equilibrium selection; Heterogeneous agents (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:380:y:2007:i:c:p:519-527

DOI: 10.1016/j.physa.2007.02.073

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