Coordination in a Changing Environment
39 Pages Posted: 2 Oct 2012 Last revised: 24 Nov 2014
Date Written: November 20, 2014
In this paper we consider a model where boundedly rational agents choose both which coordination game to play and what action to take in that game, when their information and mobility is limited and change over time. We completely characterize both short-run and long-run outcomes. There are multiple types of short-run predictions in which agents may be at different locations, taking different actions. In the long-run, however, all agents are at the same location and take the same action in that game. The long-run prediction is unique and globally efficient most of the time.
Keywords: Stochastic Stability, Networks, Coordination, Mobile agents
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