Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89267
Authors: 
Ille, Sebastian
Year of Publication: 
2013
Series/Report no.: 
LEM Working Paper Series 2013/04
Abstract: 
This paper is based on Ille 2013. Both papers analyze the same model, but in contrast, this paper does not provide an analytical solution but rather resorts to simulations. This allows the reader, who is familiar with the former article, to retrace the results more thoroughly and without the requirement of a sophisticated mathematical background. Additionally, this paper illustrates the dynamics of the setting. Focus is placed on 2 × 2 Nash coordination games on a two-dimensional lattice. Players imitate the most successful player in their reference group (Moore neighborhood) in the former period. Similarly individual pay-off is only defined by the current strategic choice of this reference group. We observe that the long-term convention is defined by a trade-off between risk and efficiency and that player population converges to the Pareto dominant though risk inferior convention for a broad range of pay-off configurations. In the case of two player populations, the long-term convention is defined by the equilibrium granting the highest benefit to one population. Consequently, conventions illustrate a tendency to be inegalitarian.
Subjects: 
Existence and Stability of Equilibria
Evolutionary Games
Behavior
Simulation Modeling
JEL: 
C62
C63
D73
D03
D83
Document Type: 
Working Paper

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