eprintid: 3871
rev_number: 5
eprint_status: archive
userid: 69
dir: disk0/00/00/38/71
datestamp: 2018-01-24 10:27:09
lastmod: 2018-01-24 10:27:09
status_changed: 2018-01-24 10:27:09
type: article
metadata_visibility: show
creators_name: Bilancini, Ennio
creators_name: Boncinelli, Leonardo
creators_id: ennio.bilancini@imtlucca.it
creators_id: 
title: Social coordination with locally observable types
ispublished: inpress
subjects: HB
divisions: EIC
full_text_status: none
abstract: 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.
date: 2017
date_type: published
publication: Economic Theory
publisher: Springer
pagerange: 1-35
id_number: doi: 10.1007/s00199-017-1047-y
refereed: TRUE
issn: 0938-2259
official_url: http://link.springer-ny.com/link/service/journals/00199/index.htm
citation:   Bilancini, Ennio and Boncinelli, Leonardo  Social coordination with locally observable types.  Economic Theory.  pp. 1-35.  ISSN 0938-2259    (In Press)   (2017)