IDEAS home Printed from https://ideas.repec.org/a/bpj/bejtec/vadvances.3y2003i1n2.html
   My bibliography  Save this article

Contagion and State Dependent Mutations

Author

Listed:
  • Lee In Ho

    (Seoul National University and University of Southampton)

  • Szeidl Adam

    (Harvard University)

  • Valentinyi Akos

    (University of Southampton, Institute of Economics, Hungarian Academy of Sciences & CEPR)

Abstract

Early results of evolutionary game theory showed that the risk dominant equilibrium is uniquely selected in the long run under the best-response dynamics with mutation. Bergin and Lipman (1996) qualified this result by showing that for a given population size, the evolutionary process can select any strict Nash equilibrium if the probability of choosing a nonbest response is state-dependent. This paper shows that the unique selection of the risk dominant equilibrium is robust with respect to state dependent mutation in local interaction games. More precisely, for any given mutation structure there exists a minimum population size beyond which the risk dominant equilibrium is uniquely selected. Our result is driven by contagion and cohesion among players, which exist only in local interaction settings and favor the risk dominant strategy. Our result strengthens the equilibrium selection result of evolutionary game theory.

Suggested Citation

  • Lee In Ho & Szeidl Adam & Valentinyi Akos, 2003. "Contagion and State Dependent Mutations," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 3(1), pages 1-29, February.
    • Handle: RePEc:bpj:bejtec:v:advances.3:y:2003:i:1:n:2
    DOI: 10.2202/1534-5963.1063
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1534-5963.1063
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1534-5963.1063?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bergin, James & Lipman, Barton L, 1996. "Evolution with State-Dependent Mutations," Econometrica, Econometric Society, vol. 64(4), pages 943-956, July.
    2. In Ho Lee & Akos Valentinyi, 2000. "Noisy Contagion Without Mutation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(1), pages 47-56.
    3. Stephen Morris, 2000. "Contagion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(1), pages 57-78.
    4. Blume Lawrence E., 1993. "The Statistical Mechanics of Strategic Interaction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 387-424, July.
    5. Anderlini, Luca & Ianni, Antonella, 1996. "Path Dependence and Learning from Neighbors," Games and Economic Behavior, Elsevier, vol. 13(2), pages 141-177, April.
    6. Blume Lawrence E., 1995. "The Statistical Mechanics of Best-Response Strategy Revision," Games and Economic Behavior, Elsevier, vol. 11(2), pages 111-145, November.
    7. Glenn Ellison, 2000. "Basins of Attraction, Long-Run Stochastic Stability, and the Speed of Step-by-Step Evolution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(1), pages 17-45.
    8. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
    9. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
    10. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-1071, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiang, Ge & Weidenholzer, Simon, 2014. "Local Interactions and Switching Costs," Economics Discussion Papers 9015, University of Essex, Department of Economics.
    2. Ge Jiang & Simon Weidenholzer, 2017. "Local interactions under switching costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(3), pages 571-588, October.
    3. repec:esx:essedp:746 is not listed on IDEAS
    4. Ennio Bilancini & Leonardo Boncinelli, 2020. "The evolution of conventions under condition-dependent mistakes," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(2), pages 497-521, March.
    5. repec:unm:unumer:2014036 is not listed on IDEAS
    6. Weidenholzer, Simon, 2012. "Long-run equilibria, dominated strategies, and local interactions," Games and Economic Behavior, Elsevier, vol. 75(2), pages 1014-1024.
    7. Thomas Norman, "undated". "Step-by-Step Evolution with State-Dependent Mutations," Economics Papers 2003-W08, Economics Group, Nuffield College, University of Oxford.
    8. Peski, Marcin, 2010. "Generalized risk-dominance and asymmetric dynamics," Journal of Economic Theory, Elsevier, vol. 145(1), pages 216-248, January.
    9. Azomahou, T. & Opolot, D., 2014. "Stability and strategic diffusion in networks," MERIT Working Papers 2014-035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Jiang, Ge & Weidenholzer, Simon, 2016. "Local Interactions under Switching Costs," Economics Discussion Papers 17770, University of Essex, Department of Economics.
    11. Weidenholzer, Simon, 2012. "Long-run equilibria, dominated strategies, and local interactions," Games and Economic Behavior, Elsevier, vol. 75(2), pages 1014-1024.
    12. Simon Weidenholzer, 2010. "Coordination Games and Local Interactions: A Survey of the Game Theoretic Literature," Games, MDPI, vol. 1(4), pages 1-35, November.
    13. Daniel C. Opolot & Théophile T. Azomahou, 2021. "Strategic diffusion in networks through contagion," Journal of Evolutionary Economics, Springer, vol. 31(3), pages 995-1027, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alós-Ferrer, Carlos & Weidenholzer, Simon, 2008. "Contagion and efficiency," Journal of Economic Theory, Elsevier, vol. 143(1), pages 251-274, November.
    2. Ianni, Antonella & Corradi, Valentina, 2000. "Consensus, contagion and clustering in a space-time model of public opinion formation," Discussion Paper Series In Economics And Econometrics 0009, Economics Division, School of Social Sciences, University of Southampton.
    3. Simon Weidenholzer, 2010. "Coordination Games and Local Interactions: A Survey of the Game Theoretic Literature," Games, MDPI, vol. 1(4), pages 1-35, November.
    4. Cui, Zhiwei, 2014. "More neighbors, more efficiency," Journal of Economic Dynamics and Control, Elsevier, vol. 40(C), pages 103-115.
    5. Opolot, Daniel & Azomahou, Theophile, 2012. "Learning and convergence in networks," MERIT Working Papers 2012-074, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Hsiao-Chi Chen & Yunshyong Chow & Li-Chau Wu, 2013. "Imitation, local interaction, and coordination," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(4), pages 1041-1057, November.
    7. Cui, Zhiwei & Wang, Rui, 2016. "Collaboration in networks with randomly chosen agents," Journal of Economic Behavior & Organization, Elsevier, vol. 129(C), pages 129-141.
    8. Ianni, Antonella, 2001. "Learning correlated equilibria in population games," Mathematical Social Sciences, Elsevier, vol. 42(3), pages 271-294, November.
    9. Desiree A. Desierto, 2008. "The Dynamics of Economic Integration," DEGIT Conference Papers c013_029, DEGIT, Dynamics, Economic Growth, and International Trade.
    10. Ge Jiang & Simon Weidenholzer, 2017. "Local interactions under switching costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(3), pages 571-588, October.
    11. Wallace, Chris & Young, H. Peyton, 2015. "Stochastic Evolutionary Game Dynamics," Handbook of Game Theory with Economic Applications,, Elsevier.
    12. Ennio Bilancini & Leonardo Boncinelli, 2018. "Social coordination with locally observable types," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 975-1009, June.
    13. Michael Kosfeld, 2002. "Stochastic strategy adjustment in coordination games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(2), pages 321-339.
    14. Sandholm, William H., 2007. "Pigouvian pricing and stochastic evolutionary implementation," Journal of Economic Theory, Elsevier, vol. 132(1), pages 367-382, January.
    15. Suren Basov, 2002. "Evolution of Social Behavior in the Global Economy: The Replicator Dynamics with Migration," Department of Economics - Working Papers Series 847, The University of Melbourne.
    16. Sanjeev Goyal & Fernando Vega-Redondo, 2000. "Learning, Network Formation and Coordination," Tinbergen Institute Discussion Papers 00-093/1, Tinbergen Institute.
    17. Lim, Wooyoung & Neary, Philip R., 2016. "An experimental investigation of stochastic adjustment dynamics," Games and Economic Behavior, Elsevier, vol. 100(C), pages 208-219.
    18. Carlos Alós-Ferrer & Nick Netzer, 2015. "Robust stochastic stability," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 58(1), pages 31-57, January.
    19. Bilancini, Ennio & Boncinelli, Leonardo, 2022. "The evolution of conventions in the presence of social competition," Games and Economic Behavior, Elsevier, vol. 133(C), pages 50-57.
    20. Jackson, Matthew O. & Watts, Alison, 2002. "On the formation of interaction networks in social coordination games," Games and Economic Behavior, Elsevier, vol. 41(2), pages 265-291, November.

    More about this item

    Keywords

    Contagion; state dependent mutations; risk dominance; local interaction games;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejtec:v:advances.3:y:2003:i:1:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.