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Equilibrium selection in coordination games with simultaneous play

Author

Listed:
  • Per Svejstrup Hansen

    (Unit of Economics, The Royal Veterinary and Agricultural University, Frederiksberg, DENMARK)

  • Oddvar M. Kaarbøe

    (Department of Economics and HEB, University of Bergen, Fosswinckelsgate 6,5007 Bergen, NORWAY)

Abstract

We apply the dynamic stochastic framework proposed in recent evolutionary literature to a class of coordination games played simultaneously by the entire population. In these games payoffs, and hence best replies, are determined by a summary statistic of the population strategy profile. We demonstrate that with simultaneous play, the equilibrium selection depends crucially on how best responses to the summary statistic remain piece-wise constant. In fact, all the strict Nash equilibria in the underlying stage game can be made stochastically stable depending on how the best response mapping generates piece-wise constant best responses.

Suggested Citation

  • Per Svejstrup Hansen & Oddvar M. Kaarbøe, 2002. "Equilibrium selection in coordination games with simultaneous play," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(4), pages 793-807.
    • Handle: RePEc:spr:joecth:v:20:y:2002:i:4:p:793-807
    Note: Received: February 12, 2001; revised version: October 29, 2001
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    Citations

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    Cited by:

    1. Bagnoli, Lidia & Negroni, Giorgio, 2013. "The evolution of conventions in minimum effort games," Research in Economics, Elsevier, vol. 67(3), pages 259-277.
    2. Hehenkamp, Burkhard & Kaarbøe, Oddvar M., 2004. "Equilibrium selection in supermodular games with mean payoff technologies," Working Papers in Economics 08/04, University of Bergen, Department of Economics.
    3. Dietrichson, Jens & Jochem, Torsten, 2014. "Organizational coordination and costly communication with boundedly rational agents," Comparative Institutional Analysis Working Paper Series 2014:1, Lund University, Comparative Institutional Analysis, School of Economics and Management.
    4. Dietrichson, Jens & Gudmundsson, Jens & Jochem, Torsten, 2014. "Let's Talk It Over: Communication and Coordination in Teams," Working Papers 2014:2, Lund University, Department of Economics, revised 18 Apr 2018.
    5. Kim, Chongmin & Wong, Kam-Chau, 2010. "Long-run equilibria with dominated strategies," Games and Economic Behavior, Elsevier, vol. 68(1), pages 242-254, January.
    6. Suren Basov & Liam Blanckenberg & Lata Gangadharan, 2007. "Behavioural Anomalies, Bounded Rationality and Simple Heuristics," Department of Economics - Working Papers Series 1012, The University of Melbourne.

    More about this item

    Keywords

    Coordination; Equilibrium selection; Market games.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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