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Contagion and efficiency


Alós-Ferrer, Carlos; Weidenholzer, Simon (2008). Contagion and efficiency. Journal of Economic Theory, 143(1):251-274.

Abstract

We consider a population of agents, either finite or countably infinite, located on an arbitrary network. Agents interact directly only with their immediate neighbors, but are able to observe the behavior of (some) other agents beyond their interaction neighborhood, and learn from that behavior by imitating successful actions. If interactions are not “too global” but information is fluid enough, we show that the efficient action is the only one which can spread contagiously to the whole population from an initially small, finite subgroup. This result holds even in the presence of an alternative, $\nicefrac{1}{2}$-dominant action.

Abstract

We consider a population of agents, either finite or countably infinite, located on an arbitrary network. Agents interact directly only with their immediate neighbors, but are able to observe the behavior of (some) other agents beyond their interaction neighborhood, and learn from that behavior by imitating successful actions. If interactions are not “too global” but information is fluid enough, we show that the efficient action is the only one which can spread contagiously to the whole population from an initially small, finite subgroup. This result holds even in the presence of an alternative, $\nicefrac{1}{2}$-dominant action.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Economics and Econometrics
Uncontrolled Keywords:Local interaction games, learning, imitation
Language:English
Date:November 2008
Deposited On:09 Apr 2021 07:50
Last Modified:16 Mar 2022 08:07
Publisher:Elsevier
ISSN:0022-0531
OA Status:Closed
Publisher DOI:https://doi.org/10.1016/j.jet.2007.12.003