In an (n,m)-coordination game, each of the n players has two alternative strategies. A strategy generates positive payoff only if there are at least m-1 others who choose the same, where m>n/2. The payoff is nondecreasing in the number of such others so that there are exactly two strict equilibria. Applying the adaptive play with mistakes (Young 1993) to (n,m)-coordination games, we point out potential complications inherent in many-person games. Focusing on games that admit simple analysis, we show that there is a nonempty open set of (n,m)-coordination games that possess multiple stochastically stable equilibria, which may be Pareto ranked, if and only if m>(n+3)/2, which in turn is equivalent to the condition that there is a strategy profile against which every player has alternative best responses.
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Paper provided by Graduate School of Economics, Hitotsubashi University in its series Discussion Papers with number
2006-04.
Find related papers by 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 D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General