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Coordination through Status

Author

Listed:
  • Engseld, Peter

    (Department of Economics, Lund University)

Abstract

The main purpose of this paper is to suggest a mechanism of coordination whereby concerns for high relative position might evolve endogenously. A simple symmetric 2 × 2 strategic coordination game is analyzed in an evolutionary environment where continua of bounded rational agents are randomly matched against each other. The agents are assumed to have the ability to make an imperfect observation on how their own status relates to that of their opponent. These observations are then utilized as an instrument for coordinating the strategies in the game by the conditioning of the pure strategies on whether the opponent has a higher status or a lower status. The outcome of the game is analyzed through a newly defined evolutionary criterion as the agent's observational skills come close to the limit of being perfect. It is shown that there exists an endogenous asymmetry in the model that results in just one of the conditioned strategies in the pure strategy set being evolutionary stable. Moreover, it is also shown that this strategy will prevail against strategies conditioned through other personal characteristics, e.g. size, and gender.

Suggested Citation

  • Engseld, Peter, 2003. "Coordination through Status," Working Papers 2003:11, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2003_011
    as

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    References listed on IDEAS

    as
    1. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-116, March.
    2. Harold L. Cole & George J. Mailath & Andrew Postlewaite, 1995. "Incorporating concern for relative wealth into economic models," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 19(Sum), pages 12-21.
    3. Weiss, Yoram & Fershtman, Chaim, 1998. "Social status and economic performance:: A survey," European Economic Review, Elsevier, vol. 42(3-5), pages 801-820, May.
    4. Postlewaite, Andrew, 1998. "The social basis of interdependent preferences," European Economic Review, Elsevier, vol. 42(3-5), pages 779-800, May.
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    Cited by:

    1. Engseld, Peter, 2005. "Conditioned Actions in Strategic Coordination Games," Working Papers 2005:33, Lund University, Department of Economics.

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    More about this item

    Keywords

    Coordination; Hawk-Dove Games; Positional Concerns; Status; Evolutionary Games; Evolutionary Equilibrium;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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