TY  - INPR
N2  - In this paper we study the typical dilemma of social coordination between a risk-dominant convention and a payoff-dominant convention. In particular, we consider a model where a population of agents play a coordination game over time, choosing both the action and the network of agents with whom to interact. The main modeling novelties with respect to the existing literature are: (1) Agents come in two distinct types, (2) the interaction with a different type is costly, and (3) an agent?s type is unobservable prior to interaction. We show that when the cost of interacting with a different type is small with respect to the payoff of coordination, the payoff-dominant convention is the only stochastically stable convention; instead, when the cost of interacting with a different type is large, the only stochastically stable conventions are those where all agents of one type play the payoff-dominant action and all agents of the other type play the risk-dominant action.
JF  - Economic Theory
UR  - http://link.springer-ny.com/link/service/journals/00199/index.htm
ID  - eprints3871
TI  - Social coordination with locally observable types
AV  - none
A1  - Bilancini, Ennio
A1  - Boncinelli, Leonardo
Y1  - 2017///
SP  - 1
SN  - 0938-2259
PB  - Springer
EP  - 35
ER  -