On the Relationship between p-Dominance and Stochastic Stability in Network Games
51 Pages Posted: 28 Aug 2018 Last revised: 2 Mar 2021
Date Written: August 19, 2018
Abstract
This paper examines the properties of networks that determine the uniqueness of long-run equilibria emerging from symmetric coordination games when players are myopic best responders. We identify the contagion threshold and the network diameter as two measures of finite networks that determine when strategies in the minimal p-best response set of a coordination game are uniquely stochastically stable. We show that when the contagion threshold is greater or equal to p, strategies in the minimal p-best response set are uniquely stochastically stable in strongly connected networks with diameter greater or equal to seven. The contagion threshold and the network diameter are easy to compute and their values are unique for every strongly connected network.
Keywords: evolutionary dynamics, stochastic stability, networks, p-best response set, contagion threshold
JEL Classification: C72, C73, D83, D85
Suggested Citation: Suggested Citation