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Imitation and the Role of Information in Overcoming Coordination Failures

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Abstract

We model the structure of a firm or an organization as a network and consider minimum-effort games played on this network as a metaphor for cooperations failing due to coordination failures. For a family of behavioral rules, including Imitate the Best and the Proportional Imitation Rule, we show that inefficient conventions arise independently of the interaction structure, if information is limited to the interaction neighborhoods. However, in the presence of informational spillovers, a minimal condition on the network guarantees that efficient conventions will eventually dominate. An analogous result is established for average opinion games.

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  • Carlos Alós-Ferrer & Simon Weidenholzer, 2010. "Imitation and the Role of Information in Overcoming Coordination Failures," Vienna Economics Papers vie1008, University of Vienna, Department of Economics.
  • Handle: RePEc:vie:viennp:vie1008
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    4. Nicola Campigotto, 2021. "Pairwise imitation and evolution of the social contract," Journal of Evolutionary Economics, Springer, vol. 31(4), pages 1333-1354, September.
    5. Lu, Feifei & Shi, Fei, 2023. "Coordination with heterogeneous interaction constraints," Games and Economic Behavior, Elsevier, vol. 142(C), pages 645-665.
    6. Jose Apesteguia & Steffen Huck & Jörg Oechssler & Elke Weidenholzer & Simon Weidenholzer, 2018. "Imitation of Peers in Children and Adults," Games, MDPI, vol. 9(1), pages 1-15, March.
    7. Alós-Ferrer, Carlos & Buckenmaier, Johannes, 2017. "Trader matching and the selection of market institutions," Journal of Mathematical Economics, Elsevier, vol. 69(C), pages 118-127.
    8. Choudhury, Kangkan Dev & Aydinyan, Tigran, 2023. "Stochastic replicator dynamics: A theoretical analysis and an experimental assessment," Games and Economic Behavior, Elsevier, vol. 142(C), pages 851-865.
    9. Lu, Feifei, 2023. "Local information hinders coordination in endogenous networks," Economics Letters, Elsevier, vol. 223(C).
    10. Mohlin, Erik & Östling, Robert & Wang, Joseph Tao-yi, 2020. "Learning by similarity-weighted imitation in winner-takes-all games," Games and Economic Behavior, Elsevier, vol. 120(C), pages 225-245.
    11. Jonathan Newton, 2018. "Evolutionary Game Theory: A Renaissance," Games, MDPI, vol. 9(2), pages 1-67, May.
    12. Edgar J. Sánchez Carrera & Elena Gubar & Andrey F. Oleynik, 2019. "Network Structures and Poverty Traps," Dynamic Games and Applications, Springer, vol. 9(1), pages 236-253, March.
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    17. Pin, Paolo & Weidenholzer, Elke & Weidenholzer, Simon, 2017. "Constrained mobility and the evolution of efficient outcomes," Journal of Economic Dynamics and Control, Elsevier, vol. 82(C), pages 165-175.

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    JEL classification:

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

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