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Bandwagon effects and constrained network formation

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  • Cui, Zhiwei
  • Shi, Fei

Abstract

We consider a model where players can actively form a limited number of links with other players to play a general class of size-dependent coordination games. This class of games includes multi-person binary action coordination games, minimum effort games, average opinion games, and others, and it is mainly characterized by strategic complementarities among actions. Whenever players may only support links to a relatively small number of other players, the most efficient convention will be selected, irrespective of the details of the size-dependent coordination games. When the linking constraint becomes less restrictive, the most efficient convention will still be selected, provided that the most efficient action delivers a relatively high output when played against a small group also using it. Furthermore, for the special case of size-dependent minimum effort games, the second most efficient convention may be selected.

Suggested Citation

  • Cui, Zhiwei & Shi, Fei, 2022. "Bandwagon effects and constrained network formation," Games and Economic Behavior, Elsevier, vol. 134(C), pages 37-51.
  • Handle: RePEc:eee:gamebe:v:134:y:2022:i:c:p:37-51
    DOI: 10.1016/j.geb.2022.03.014
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    4. Lu, Feifei & Shi, Fei, 2023. "Coordination with heterogeneous interaction constraints," Games and Economic Behavior, Elsevier, vol. 142(C), pages 645-665.

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    More about this item

    Keywords

    Bandwagon effects; Coordination games; Learning; Network formation;
    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
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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