Abstract
We study how payoffs and network structure affect reaching the payoff-dominant equilibrium in a 2times 2 coordination game that actors play with their neighbors in a network. Using an extensive simulation analysis of over 100,000 networks with 2–25 actors, we show that the importance of network characteristics is restricted to a limited part of the payoff space. In this part, we conclude that the payoff-dominant equilibrium is chosen more often if network density is larger, the network is more centralized, and segmentation of the network is smaller. Moreover, it is more likely that heterogeneity in behavior persists if the network is more segmented and less centralized. Persistence of heterogeneous behavior is not related to network density.
Highlights
While social networks are widely considered as facilitators for cooperation and are judged as instrumental for reaching more efficient outcomes in society [11,24], not all networks are beneficial under all circumstances
Because results in the studies summarized above focus on comparisons of large groups of networks that do not control for possible other structural differences in the networks, the reasons for effects of network characteristics on cooperation are incomplete
For reasons outlined in the previous section, we chose to analyze the relation between the network characteristics and the proportion of times actors play C separately for different values of RISK
Summary
While social networks are widely considered as facilitators for cooperation and are judged as instrumental for reaching more efficient outcomes in society [11,24], not all networks are beneficial under all circumstances. When game play occurs on networks, it is not at all obvious to which state—if any—equilibrium behavior will converge. This theoretical and empirical controversy has been most apparent in research based on Harsanyi and Selten’s [18] equilibrium selection principles payoff dominance and risk dominance. Several scholars have analyzed theoretically how equilibrium behavior, and thereby the emergence of conventions, depends on differences in the size and shape of the networks between actors (the ‘local interaction structure’), in ways similar to the seminal work of Nowak and May [23] regarding the feasibility of cooperative behavior in the Prisoner’s Dilemma when played on a lattice
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
