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Endogenous Interactions

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We examine an evolutionary model with "local interactions," so that agents are more likely to interact with some agents than with others. We first review the result that equilibrium strategy choices with given local interactions correspond to correlated equilibria of the underlying game. We then allow the pattern of interactions itself to be shaped by evolutionary pressures. If agents do not have the ability to avoid unwanted interactions, then heterogeneous outcomes can appear, including outcomes in which different groups play different Pareto ranked equilibria. If agents do have the ability to avoid undesired interactions, then we derive conditions under which outcomes must be not only homogeneous but efficient.

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  • George J. Mailath & Larry Samuelson & Avner Shaked, 1997. "Endogenous Interactions," CARESS Working Papres endo-one, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
    • Handle: RePEc:wop:pennca:endo-one
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    File URL: http://www.ssc.upenn.edu/~gmailath/wpapers/endogint.pdf
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    Cited by:

    1. 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.
    2. Michael Kosfeld, "undated". "Network Experiments," IEW - Working Papers 152, Institute for Empirical Research in Economics - University of Zurich.
    3. Edward L. Glaeser & Jose Scheinkman, 2000. "Non-Market Interactions," NBER Working Papers 8053, National Bureau of Economic Research, Inc.
    4. Sheri M. Markose, 2005. "Computability and Evolutionary Complexity: Markets as Complex Adaptive Systems (CAS)," Economic Journal, Royal Economic Society, vol. 115(504), pages 159-192, 06.
    5. Jakub Steiner, 2006. "Coordination of Mobile Labor," Edinburgh School of Economics Discussion Paper Series 152, Edinburgh School of Economics, University of Edinburgh.
    6. Francesco Feri & Miguel Meléndez-Jiménez, 2013. "Coordination in evolving networks with endogenous decay," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 955-1000, November.
    7. Jackson, Matthew O. & Watts, Alison, 2010. "Social games: Matching and the play of finitely repeated games," Games and Economic Behavior, Elsevier, vol. 70(1), pages 170-191, September.
    8. Edward Droste & Robert P. Gilles & Cathleen Johnson, 2000. "Evolution of Conventions in Endogenous Social Networks," Econometric Society World Congress 2000 Contributed Papers 0594, Econometric Society.
    9. Susan Lee, 1999. "Assortative Interactions and Endogenous Stratification," Working Papers 99-08-056, Santa Fe Institute.
    10. Steiner, Jakub, 2008. "Coordination of mobile labor," Journal of Economic Theory, Elsevier, vol. 139(1), pages 25-46, March.

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