Network characteristics enabling efficient coordination: A simulation study

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Working paper
Abhimanyu Khan, Ronald Peeters, Frank Thuijsman, Philippe Uyttendaele
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Maastricht University
The primary question in coordination games concerns the possibility of achieving efficient coordination. We consider a situation where individuals from a finite population are randomly matched to play a coordination game. While this interaction is global in the sense that the co-player can be drawn from the entire population, individuals observe the strategies and payoffs of only the direct connections or neighbors in their social network. The most successful strategy used in the neighborhood is imitated. We study how the network structure in fluences the dynamic process of achieving efficient coordination. We simulate this coordination game for small-world and scale-free networks and find that segregation is an important factor in determining the possibility of efficient coordination. In addition, a classification tree analysis reveals segregation to be an important variable of the nonoccurrence of efficient coordination.
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