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Constrained Interactions and Social Coordination

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  • Staudigl, M
  • Weidenholzer, S

Abstract

We consider a co-evolutionary model of social coordination and network formation where agents may decide on an action in a 2x2 - coordination game and on whom to establish costly links to. We find that a payoff domination convention is selected for a wider parameter range when agents may only support a limited number of links as compared to a scenario where agents are not constrained in their linking choice. The main reason behind this result is that whenever there is a small cluster of agents playing the efficient strategy other players want to link up to those layers and choose the efficient action.

Suggested Citation

  • Staudigl, M & Weidenholzer, S, 2014. "Constrained Interactions and Social Coordination," Economics Discussion Papers 10007, University of Essex, Department of Economics.
    • Handle: RePEc:esx:essedp:10007
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    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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