Path Dependence and Learning from Neighbors |
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Authors: | Luca Anderlini Antonella Ianni |
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Institution: | aSt. John's College, Cambridge, United Kingdom;bUniversity College London, London, United Kingdom |
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Abstract: | We study the long-run properties of a class of locally interactive learning systems. A finite set of players at fixed locations play a two-by-two symmetric normal form game with strategic complementarities, with one of their “neighbors” selected at random. Because of the endogenous nature of experimentation, or “noise,” the systems we study exhibit a high degree of path dependence. Different actions of a pure coordination game may survive in the long-run at different locations of the system. A reinterpretation of our results shows that the local nature of search may be a robust reason for price dispersion in a search model,Journal of Economic LiteratureClassification Numbers: C72, D83. |
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