Coordination on networks with farsighted and myopic agents

Ana Mauleon, Simon, Schopohl, Akylai, Taalaibekova () and Vincent Vannetelbosch
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Simon, Schopohl: Université Saint-Louis and CORE
Akylai, Taalaibekova: CORE, UCLouvain and Université Pars 1

No 2020019, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We study a coordination game on a fixed connected network where players have to choose between two projects. Some players are moderate (i.e. they are ex-ante indifferent between both project) while others are stubborn (i.e. They always choose the same project). Benefits for moderaote players are increasing in the number of neighbors who choose the same project. In addition, players are either farsighted or myopic. Farsighted players anticipate the reactions of others while myopic players do not. We show that, when all players are farsighted, full coordination among the moderate players is reached except if there are stubborn players for both projects. When the population is mixed, the set of stable strategy profiles is a refinement of the set of Nash equilibrium strategy profiles. In fact, turning myopic players into farsighted ones eliminates little by little in the inefficient Nash equilibria. Finally, we consider a social planner who can improve coordination by means of two policy instruments: Adding links to the network (socialization) and/or turning myopic players into farsighted ones (education).

Keywords: networks; coordination problems; stubborn players; farsighted players; stability (search for similar items in EconPapers)
JEL-codes: A14 C70 D20 (search for similar items in EconPapers)
Date: 2020-02-11
New Economics Papers: this item is included in nep-gth, nep-net and nep-ppm
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Related works:
Journal Article: Coordination on networks with farsighted and myopic agents (2022)
Working Paper: Coordination on networks with farsighted and myopic agents (2022)
Working Paper: Coordination on networks with farsighted and myopic agents (2022)
Working Paper: Coordination on networks with farsighted and myopic agents (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2020019

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