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Partial bandwagon effects and local interactions. (English) Zbl 1271.91008

Summary: We consider partial bandwagon properties in the context of coordination games to capture the idea of weak network externalities. We then study a local interactions model where agents play a coordination game following a noisy best-reply process. We show that globally pairwise risk dominant strategies are selected in arbitrary \(3\times 3\) coordination games, but not necessarily in larger games. A comparison with the global interactions benchmark shows that the nature of interactions might alter the long-run results themselves, and not only the speed of convergence. We also illustrate that the simultaneous coexistence of conventions is possible for games with at least 5 strategies.

MSC:

91A10 Noncooperative games
91A26 Rationality and learning in game theory
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