Lock-in through passive connections

• 成果类型: Article
• 署名作者: Cui, Zhiwei; Weidenholzer, Simon
• 署名单位: Beihang University; Beihang University; University of Essex
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2021.105187
• 发表日期: 2021
• 关键词: Social coordination; network formation; learning; lock-in

摘要

We consider a model of social coordination and network formation where agents decide on an action in a coordination game and on whom to establish costly links to. We study the role of passive connections; these are links that other agents form to a given agent. Such passive connections may create an endogenously arising form of lock-in where agents don't switch actions and links, as this may result in a loss of payoff received through them. When agents are constrained in the number of links they form, the set of Nash equilibria includes action-heterogenous strategy profiles, where different agents choose different actions. Depending on the precise parameters of the model, risk-dominant, payoff-dominant, or action-heterogenous strategy profiles are stochastically stable. (C) 2021 Elsevier Inc. All rights reserved.