Learning, Network Formation and Coordination

Sanjeev Goyal and Fernando Vega-Redondo ()
Additional contact information
Fernando Vega-Redondo: Universidad de Alicante, and Universitat Pompeu Fabra, Barcelona

No 00-093/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: In many economic and social contexts, individual players choose their partners and also decide ona mode of behavior in interactions with these partners. This paper develops a simple model toexamine the interaction between partner choice and individual behavior in games of coordination.An important ingredient of our approach is the way we model partner choice: we suppose that aplayer can establish ties with other players by investing in costly pair-wise links.We show that individual efforts to balance the costs and benefits of links sharply restrict therange of stable interaction architectures; equilibrium networks are either complete or have the stararchitecture. Moreover, the process of network formation has powerful effects on individualbehavior: if costs of forming links are low then players coordinate on the risk-dominant action,while if costs of forming links are high then they coordinate on the efficient action.

Date: 2000-11-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://papers.tinbergen.nl/00093.pdf (application/pdf)

Related works:
Working Paper: LEARNING, NETWORK FORMATION AND COORDINATION (2001)
Working Paper: Learning, Network Formation and Coordination (2000)
Working Paper: Learning, Network Formation and Coordination (2000)
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: https://EconPapers.repec.org/RePEc:tin:wpaper:20000093

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().