History as a Coordination Device

Coordination games often have multiple equilibria. The selection of equilibrium raises the question of belief formation: how do players generate beliefs about the behavior of other players? This paper takes the view that the answer lies in history, that is, in the outcomes of similar coordination games played in the past, possibly by other players. We analyze a simple model in which a large population has to make a simultaneous decision regarding participation in a coup attempt. We assume a dynamic process that faces different populations with such games for randomly selected values of a parameter. We show that history serves as a coordination device, and determines for which values of the parameter a revolution would succeed. We also show that, for certain values of the parameter in question, the limit behavior depends on the way history unfolds, and cannot be determined from a-priori considerations.