David Hagmann and Troy Tassier

We study the effects of agent turnover and agent movement on equilibrium selection in spatial coordination games with Pareto dominant and risk dominant Nash equilibria. Our primary interest is in understanding how various dynamic processes influence 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, as in Hagmann and Tassier (2012) we find that allowing agents to move increases the likelihood of attaining the Pareto dominant Nash equilibrium. The effects of agent turnover are more nuanced with the effects depending on the ability of agents to relocate on the lattice. Increasing the rate of turnover when movement is not allowed in the model increases the likelihood of attaining the Pareto dominant Nash equilibrium. Increasing the rate of turnover when movement is allowed in the model decreases the likelihood of attaining the Pareto dominant Nash equilibrium in some circumstances.

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