Endogenous Movement and Equilibrium Selection in Spatial Coordination Games

Troy Tassier, Jason Barr, David Hagmann

We study the effects of agent movement on equilibrium selection in spatial coordination games with Pareto dominant and risk dominant Nash equilibria. We incorporate agent movement, and thereby partner selection, into the strategies of agents in a class of spatial coordination games. Our primary interest is in understanding how endogenous partner selection on networks influences equilibrium selection in games with multiple equilibria. We use agent based models and best response behaviors of agents to study our questions of interest. In general, we find that allowing agents to move greatly increases the probability of selecting the Pareto dominant Nash equilibrium in coordination games.

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