Information, Matching and Outcome Selection
We consider a finite population of agents who exchange information and are paired every period to play a game with tension between risk dominance and Pareto efficiency. Agents sample past plays and corresponding payoffs from their information neighborhood, and choose one of two possible actions using either best response or imitation. Information exchanges and possible matchings each constitutes a network. We first provide a complete description of the medium run outcomes and show that in the medium run only information matters. We then identify the conditions whereby either the risk dominant or the Pareto efficient convention is stochastically stable, and show how efficiency in the long run depends on the matching network.
|Date of creation:||Mar 2011|
|Contact details of provider:|| Postal: Adelaide SA 5005|
Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alós-Ferrer, Carlos & Weidenholzer, Simon, 2008. "Contagion and efficiency," Journal of Economic Theory, Elsevier, vol. 143(1), pages 251-274, November.
When requesting a correction, please mention this item's handle: RePEc:adl:wpaper:2011-13. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dmitriy Kvasov)
If references are entirely missing, you can add them using this form.