Economics at your fingertips  

Lock-in through passive connections

Zhiwei Cui () and Simon Weidenholzer

Economics Discussion Papers from University of Essex, Department of Economics

Abstract: We consider a model of social coordination and network formation where agents decide on an action in a coordination game and on whom to establish costly links to. We study the role of passive connections; these are connections to a given agent that are supported by other agents. Such passive connections may inhibit agents from switching actions and links, as this may result in a loss of payoff received through them. When agents are constrained in the number of links they may support, this endogenously arising form of lock-in leads to mixed profiles, where different agents choose different actions, being included in the set of Nash equilibria. Depending on the precise parameters of the model, risk- dominant, payoff- dominant, or mixed profiles are stochastically stable. Thus, agents’ welfare may be lower as compared to the case where payoff is only received through active links. The network formed by agents plays a crucial role for the propagation of actions, it allows for a contagious spread of risk dominant actions and evolves as agents change their links and actions.

Keywords: Social coordination; Network formation; Learning; Lock-in (search for similar items in EconPapers)
Date: 2018-10-22
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) original version (application/pdf)

Related works:
Journal Article: Lock-in through passive connections (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This working paper can be ordered from
Discussion Papers Administrator, Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, U.K. ... /papers-request.aspx

Access Statistics for this paper

More papers in Economics Discussion Papers from University of Essex, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Essex Economics Web Manager ().

Page updated 2023-01-18
Handle: RePEc:esx:essedp:23348