Coordination in the Aggregate without Common Knowledge or Outcome Information
In his book “Micromotives and Macrobehavior” Schelling set the stage for a systematic analysis that explores the relation “between the behavior characteristics of the individuals who comprise some social aggregate, and the characteristics of the aggregate” (1978, p.13). This analysis is both challenging and difficult because the entire aggregate outcome is evaluated, not merely how each individual does within the constraints of her own environment. Aggregate behavior necessarily involves some sort of coordination. In reflecting on how ant colonies work, Schelling noted (see also Gordon, 1999) that “why the system works as it does, and as efficiently as it does, is a dynamic problem of social and genetic evolution” (1978, p. 21).
KeywordsNash Equilibrium Common Knowledge Coordination Game Entry Cost Stage Game
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