Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320294 
Authors: 
Year of Publication: 
2025
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 20 [Issue:] 2 [Year:] 2025 [Pages:] 583-622
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We study static binary coordination games with random utility played on networks. In equilibrium, each agent chooses an action only if a fraction of her neighbors choosing the same action is higher than an agent-specific i.i.d. threshold. A fuzzy convention x is a profile where (almost) all agents choose the high action if their threshold is smaller than x and the low action otherwise. The random-utility (RU) dominant outcome x * is a maximizer of an integral of the distribution of thresholds. The definition generalizes Harsanyi-Selten's risk dominance to coordination games with random utility. We show that, on each sufficiently large and fine network, there is an equilibrium that is a fuzzy convention x * . On some networks, including a city network, all equilibria are fuzzy conventions x * . Finally, fuzzy conventions x * are the only behavior that is robust to misspecification of the network structure.
Subjects: 
Random utility
coordination games
networks
JEL: 
C7
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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