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Imitation, local interaction, and coordination

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  • Hsiao-Chi Chen
  • Yunshyong Chow
  • Li-Chau Wu

Abstract

This paper analyzes players’ long-run behavior in evolutionary coordination games with imitation and one-dimensional local interaction. Players are assumed to interact with their two neighbors and to imitate actions with the highest average payoffs. We find that the payoff-dominant equilibrium survives in the long run with positive probability. The results derive the conditions under which both risk-dominant-strategy and payoff-dominant-strategy takers co-exist in the long run. The risk-dominant equilibrium is the unique long-run equilibrium for the remaining cases. This study extends and complements the analyses of Eshel et al. (Am Econ Rev 88:157–179, 1998 ) and Vega-Redondo (Evolution, games, and economic behaviour, 1996 ). Combining Alós-Ferrer and Weidenholzer’s (Econ Lett 93:163–168, 2006 ; J Econ Theory 14:251–274, 2008 ) and our results, we conclude that players’ long-run behavior varies with imitation rules and information collecting modes. Finally, we show the convergence rate to all the long-run equilibria. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • 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.
  • Handle: RePEc:spr:jogath:v:42:y:2013:i:4:p:1041-1057
    DOI: 10.1007/s00182-012-0353-7
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    References listed on IDEAS

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    Cited by:

    1. Hsiao‐Chi Chen & Yunshyong Chow & Shi‐Miin Liu, 2022. "International environmental agreements under an evolutionary mechanism of imitation and asymmetric countries," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(3), pages 285-309, September.
    2. Abhimanyu Khan & Ronald Peeters & Frank Thuijsman & Philippe Uyttendaele, 2016. "Network Characteristics Enabling Efficient Coordination: A Simulation Study," Dynamic Games and Applications, Springer, vol. 6(4), pages 495-519, December.
    3. Antonio Cabrales & Esther Hauk, 2022. "Norms and the Evolution of Leaders' Followership," CESifo Working Paper Series 9845, CESifo.
    4. Hsiao-Chi Chen & Shi-Miin Liu, 2017. "An Evolutionary Approach to International Environmental Agreements with Full Participation," RIEEM Discussion Paper Series 1702, Research Institute for Environmental Economics and Management, Waseda University.
    5. Hsiao‐Chi Chen & Shi‐Miin Liu, 2023. "International environmental agreements under different evolutionary imitation mechanisms," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(2), pages 248-289, June.
    6. Daniel Christopher Opolot, 2022. "On the relationship between p-dominance and stochastic stability in network games," International Journal of Game Theory, Springer;Game Theory Society, vol. 51(2), pages 307-351, June.
    7. Cui, Zhiwei, 2014. "More neighbors, more efficiency," Journal of Economic Dynamics and Control, Elsevier, vol. 40(C), pages 103-115.
    8. Zhigang Cao & Cheng-zhong Qin & Xiaoguang Yang & Boyu Zhang, 2019. "Dynamic matching pennies on networks," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(3), pages 887-920, September.

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    More about this item

    Keywords

    Coordination game; Imitation; Local interaction; C72; C73; D83;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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