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Coordination on networks with farsighted and myopic agents

Author

Listed:
  • MAULEON Ana,

    (Université Saint Louis, Bruxelles)

  • SCHOPOHL Simon,

    (Université Saint-Louis and CORE)

  • TAALAIBEKOVA Akylai,

    (CORE, UCLouvain and Université Pars 1)

  • VANNETELBOSCH Vincent,

    (CORE, UCLouvain)

Abstract

We study a coordination game on a fixed connected network where players have to choose between two projects. Some players are moderate (i.e. they are ex-ante indifferent between both project) while others are stubborn (i.e. They always choose the same project). Benefits for moderaote players are increasing in the number of neighbors who choose the same project. In addition, players are either farsighted or myopic. Farsighted players anticipate the reactions of others while myopic players do not. We show that, when all players are farsighted, full coordination among the moderate players is reached except if there are stubborn players for both projects. When the population is mixed, the set of stable strategy profiles is a refinement of the set of Nash equilibrium strategy profiles. In fact, turning myopic players into farsighted ones eliminates little by little in the inefficient Nash equilibria. Finally, we consider a social planner who can improve coordination by means of two policy instruments: Adding links to the network (socialization) and/or turning myopic players into farsighted ones (education).

Suggested Citation

  • MAULEON Ana, & SCHOPOHL Simon, & TAALAIBEKOVA Akylai, & VANNETELBOSCH Vincent,, 2020. "Coordination on networks with farsighted and myopic agents," LIDAM Discussion Papers CORE 2020019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2020019
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    References listed on IDEAS

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    More about this item

    Keywords

    networks; coordination problems; stubborn players; farsighted players; stability;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General

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