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Network Formation And Anti-Coordination Games

Author

Listed:
  • Dunia López-Pintado

    (Universidad de Alicante)

  • Fernando Vega Redondo

    (Instituto Valenciano de Investigaciones Económicas)

  • Sanjeev Goyal

    (Queen Mary, University of London)

  • Yann Bramoulle

    (Université de Toulouse)

Abstract

We study a setting in which individual players choose their partners as well as a mode of behavior in 2 x 2 anti-coordination games -- games where a player's best response is to behave differently than the opponent. We characterize the nature of equilibrium networks as well as study the effects of network structure on individual behavior. Our analysis shows that both the network architecture and the induced behavior are crucially dependent on the value of the cost of forming links. In general, the equilibrium configurations are found to be neither unique nor efficient. This conclusion continues to hold if the population game is embedded in a standard evolutionary model of learning, since all equilibria turn out to be stochastically stable.

Suggested Citation

  • Dunia López-Pintado & Fernando Vega Redondo & Sanjeev Goyal & Yann Bramoulle, 2002. "Network Formation And Anti-Coordination Games," Working Papers. Serie AD 2002-25, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2002-25
    as

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    References listed on IDEAS

    as
    1. Sanjeev Goyal & Fernando Vega-Redondo, 2000. "Learning, Network Formation and Coordination," Tinbergen Institute Discussion Papers 00-093/1, Tinbergen Institute.
    2. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-1071, September.
    3. Rachel E. Kranton & Deborah F. Minehart, 2001. "A Theory of Buyer-Seller Networks," American Economic Review, American Economic Association, vol. 91(3), pages 485-508, June.
    4. Anderlini, Luca & Ianni, Antonella, 1996. "Path Dependence and Learning from Neighbors," Games and Economic Behavior, Elsevier, vol. 13(2), pages 141-177, April.
    5. Stef Tijs & Anne van den Nouweland & Bhaskar Dutta, 1998. "Link formation in cooperative situations," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(2), pages 245-256.
    6. Samuelson Larry, 1994. "Stochastic Stability in Games with Alternative Best Replies," Journal of Economic Theory, Elsevier, vol. 64(1), pages 35-65, October.
    7. 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.
    8. 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.
    9. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
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