Information, Matching and Outcome Selection

Virginie Masson

No 2011-13, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy

Abstract: We consider a finite population of agents who exchange information and are paired every period to play a game with tension between risk dominance and Pareto efficiency. Agents sample past plays and corresponding payoffs from their information neighborhood, and choose one of two possible actions using either best response or imitation. Information exchanges and possible matchings each constitutes a network. We first provide a complete description of the medium run outcomes and show that in the medium run only information matters. We then identify the conditions whereby either the risk dominant or the Pareto efficient convention is stochastically stable, and show how efficiency in the long run depends on the matching network.

Keywords: Contagion; networks; coordination games; best response; imitation (search for similar items in EconPapers)
JEL-codes: C73 D85 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-03
New Economics Papers: this item is included in nep-gth, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:adl:wpaper:2011-13

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