On the geography of conventions

Andreas Blume, Ted Temzelides

Research output: Contribution to journalArticle

10 Scopus citations

Abstract

We study an evolutionary model in which heterogenous boundedly rational agents interact locally in order to play a coordination game. Agents differ in their mobility with mobile agents being able to relocate within a country. We find that mobile agents enjoy a higher payoff and always benefit from increased mobility, while immobile agents benefit from increased mobility at low levels of mobility only. This wedge in payoffs weakly increases as mobility increases. Some extensions are discussed.

Original languageEnglish (US)
Pages (from-to)863-873
Number of pages11
JournalEconomic Theory
Volume22
Issue number4
DOIs
StatePublished - Nov 1 2003
Externally publishedYes

Keywords

  • Equilibrium selection
  • Evolutionary dynamics
  • Restricted mobility

ASJC Scopus subject areas

  • Economics and Econometrics

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