IDEAS home Printed from https://ideas.repec.org/p/uts/ecowps/36.html
   My bibliography  Save this paper

Emergent Coordination among Competitors

Author

Listed:

Abstract

Crawford and Haller (1990) describe a repeated two-player coordination game defined by the absence of a common language. Coordination is achieved only through path dependent play relying on time consistent labels. We consider a game played by a large population similarly looking to coordinate but without the consistency in labels over time and with asymmetric coordinated payoff so that players have differing preferences regarding which coordinated structure emerges. In experiments, we link subjects together in a social network with limited ability to observe others. The complexity of the game and multitude of states thwarts solving for optimal play and yet the population demonstrates success in employing path dependency and the consistency of the social relationships to learn to coordinate. To capture this evolution, we model decisions with an experience-weighted attractor having recency, reinforcement, and lock-on biases. We find considerable heterogeneity in biases across individuals. Drawing on the observed biases, we conduct simulations to identify the extent to which individuals and environment determine group dynamics.

Suggested Citation

  • AJ Bostian & David Goldbaum, 2016. "Emergent Coordination among Competitors," Working Paper Series 36, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
  • Handle: RePEc:uts:ecowps:36
    as

    Download full text from publisher

    File URL: http://www.uts.edu.au/sites/default/files/Leader.vexp_.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
    2. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-1071, September.
    3. Reinganum, Jennifer F., 1985. "A two-stage model of research and development with endogenous second-mover advantages," International Journal of Industrial Organization, Elsevier, vol. 3(3), pages 275-292, September.
    4. Acemoglu, Daron & Bimpikis, Kostas & Ozdaglar, Asuman, 2014. "Dynamics of information exchange in endogenous social networks," Theoretical Economics, Econometric Society, vol. 9(1), January.
    5. William A. Brock & Steven N. Durlauf, 2001. "Discrete Choice with Social Interactions," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 235-260.
    6. Avinash Dixit, 2003. "Clubs with Entrapment," American Economic Review, American Economic Association, vol. 93(5), pages 1824-1829, December.
    7. W. Brian Arthur, 1994. "Inductive Reasoning, Bounded Rationality and the Bar Problem," Working Papers 94-03-014, Santa Fe Institute.
    8. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    9. Cowan, Robin & Jonard, Nicolas, 2004. "Network structure and the diffusion of knowledge," Journal of Economic Dynamics and Control, Elsevier, vol. 28(8), pages 1557-1575, June.
    10. Kirman, Alan & Markose, Sheri & Giansante, Simone & Pin, Paolo, 2007. "Marginal contribution, reciprocity and equity in segregated groups: Bounded rationality and self-organization in social networks," Journal of Economic Dynamics and Control, Elsevier, vol. 31(6), pages 2085-2107, June.
    11. Matthew O. Jackson & Bhaskar Dutta, 2000. "original papers : The stability and efficiency of directed communication networks," Review of Economic Design, Springer;Society for Economic Design, vol. 5(3), pages 251-272.
    12. Geoffrey Heal & Howard Kunreuther, 2010. "Social Reinforcement: Cascades, Entrapment, and Tipping," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 86-99, February.
    13. Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
    14. Sadanand, Venkatraman, 1989. "Endogenous diffusion of technology," International Journal of Industrial Organization, Elsevier, vol. 7(4), pages 471-487, December.
    15. Arthur, W Brian, 1994. "Inductive Reasoning and Bounded Rationality," American Economic Review, American Economic Association, vol. 84(2), pages 406-411, May.
    16. Crawford, Vincent P & Haller, Hans, 1990. "Learning How to Cooperate: Optimal Play in Repeated Coordination Games," Econometrica, Econometric Society, vol. 58(3), pages 571-595, May.
    17. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    18. Rabah Amir & John Wooders, 1998. "Cooperation vs. competition in R&D: The role of stability of equilibrium," Journal of Economics, Springer, vol. 67(1), pages 63-73, February.
    19. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
    20. Amir, Rabah & Garcia, Filomena & Knauff, Malgorzata, 2010. "Symmetry-breaking in two-player games via strategic substitutes and diagonal nonconcavity: A synthesis," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1968-1986, September.
    21. Tesoriere, Antonio, 2008. "Endogenous R&D symmetry in linear duopoly with one-way spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 213-225, May.
    22. David Goldbaum, 2016. "Conformity and Influence," Working Paper Series 35, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    23. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    24. Jackson, Matthew O. & Watts, Alison, 2002. "The Evolution of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 106(2), pages 265-295, October.
    25. Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Experiment; Simulation; Social Network; Experience Weighted Attraction; Nested Logit;

    JEL classification:

    • 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
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uts:ecowps:36. 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: (Duncan Ford). General contact details of provider: http://edirc.repec.org/data/edutsau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.