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Equilibrium Selection in Network Coordination Games: An Experimental Study

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  • Frey Vincenz

    (Utrecht University)

  • Corten Rense

    (Utrecht University)

  • Buskens Vincent

    (Utrecht University and Erasmus University Rotterdam)

Abstract

We experimentally study equilibrium selection in repeated coordination games played on networks. We test predictions from three competing theories. In line with payoff-dominance as a deductive selection principle, experienced subjects coordinate on the payoff-dominant (but risk-dominated) equilibrium. Groups of inexperienced subjects reach coordination through adaptive dynamics, with the likelihood of convergence to the payoff-dominant equilibrium not depending on the network structure. Subjects’ reactions to deviations from an established equilibrium challenge the proposition that decision noise favors coordination on the risk-dominant equilibrium.

Suggested Citation

  • Frey Vincenz & Corten Rense & Buskens Vincent, 2012. "Equilibrium Selection in Network Coordination Games: An Experimental Study," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-28, September.
    • Handle: RePEc:bpj:rneart:v:11:y:2012:i:3:n:3
    DOI: 10.1515/1446-9022.1365
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    References listed on IDEAS

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    Cited by:

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    3. Michael Mäs & Dirk Helbing, 2020. "Random Deviations Improve Micro–Macro Predictions: An Empirical Test," Sociological Methods & Research, , vol. 49(2), pages 387-417, May.
    4. Vincent Buskens & Chris Snijders, 2016. "Effects of Network Characteristics on Reaching the Payoff-Dominant Equilibrium in Coordination Games: A Simulation study," Dynamic Games and Applications, Springer, vol. 6(4), pages 477-494, December.
    5. Cartwright, Edward & Singh, Thomas B., 2018. "Observation and contagion effects in cooperation: An experimental investigation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 74(C), pages 151-160.
    6. Alberto Antonioni & Maria Paula Cacault & Rafael Lalive & Marco Tomassini, 2013. "Coordination on Networks: Does Topology Matter?," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-11, February.
    7. Antinyan, Armenak & Horváth, Gergely & Jia, Mofei, 2020. "Positional concerns and social network structure: An experiment," European Economic Review, Elsevier, vol. 129(C).

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