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Network characteristics enabling efficient coordination: A simulation study

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  • Khan, A.

    (General Economics 0 (Onderwijs))

  • Peeters, R.J.A.P.

    (Microeconomics & Public Economics)

  • Thuijsman, F.

    (Data Science & Knowledge Engineering)

  • Uyttendaele, P.

    (Data Science & Knowledge Engineering)

Abstract

The primary question in coordination games concerns the possibility of achieving efficient coordination. We consider a situation where individuals from a finite population are randomly matched to play a coordination game. While this interaction is global in the sense that the co-player can be drawn from the entire population, individuals observe the strategies and payoffs of only the direct connections (or neighbors) in their (social) network. The most successful strategy used in the neighborhood is imitated. We study how the network structure in fluences the dynamic process of achieving efficient coordination. We simulate this coordination game for small-world and scale-free networks and find that segregation is an important factor in determining the possibility of efficient coordination. In addition, a classification tree analysis reveals segregation to be an important variable of the (non)occurrence of efficient coordination.

Suggested Citation

  • Khan, A. & Peeters, R.J.A.P. & Thuijsman, F. & Uyttendaele, P., 2014. "Network characteristics enabling efficient coordination: A simulation study," Research Memorandum 004, Maastricht University, Graduate School of Business and Economics (GSBE).
    • Handle: RePEc:unm:umagsb:2014004
    DOI: 10.26481/umagsb.2014004
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    JEL classification:

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

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