Imitation, local interaction, and coordination

Hsiao-Chi Chen (), Yunshyong Chow () and Li-Chau Wu ()

International Journal of Game Theory, 2013, vol. 42, issue 4, 1057 pages

Abstract: This paper analyzes players’ long-run behavior in evolutionary coordination games with imitation and one-dimensional local interaction. Players are assumed to interact with their two neighbors and to imitate actions with the highest average payoffs. We find that the payoff-dominant equilibrium survives in the long run with positive probability. The results derive the conditions under which both risk-dominant-strategy and payoff-dominant-strategy takers co-exist in the long run. The risk-dominant equilibrium is the unique long-run equilibrium for the remaining cases. This study extends and complements the analyses of Eshel et al. (Am Econ Rev 88:157–179, 1998 ) and Vega-Redondo (Evolution, games, and economic behaviour, 1996 ). Combining Alós-Ferrer and Weidenholzer’s (Econ Lett 93:163–168, 2006 ; J Econ Theory 14:251–274, 2008 ) and our results, we conclude that players’ long-run behavior varies with imitation rules and information collecting modes. Finally, we show the convergence rate to all the long-run equilibria. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Coordination game; Imitation; Local interaction; C72; C73; D83 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s00182-012-0353-7

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