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| Giorgio Fagiolo |
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| ''Equilibrium selection in generalized Polya-urn coordination games with partial information on population shares'' |
| ( 2025, Vol. 45 No.4 ) |
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| I investigate deterministic best-reply dynamics in generalized Polya-urn coordination games, where a Pareto dominant equilibrium coexists with a risk-dominant one and players have partial information on current population shares. After analytically deriving estimates for the basin of attraction of either equilibrium, I study numerically (and via simulation) equilibrium selection in the long run. Results indicate that risk dominance robustly prevails over Pareto efficiency as a selection principle. Furthermore, I find that the probability of selecting a Pareto-efficient outcome decreases the smaller the sample size drawn by entrants and increases the larger the initial pool of incumbents. |
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| Keywords: Polya-Urn Models, Coordination Games, Equilibrium Selection, Risk Dominance, Pareto Efficiency |
JEL: C7 - Game Theory and Bargaining Theory
C6 - Mathematical Methods and Programming: General |
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| Manuscript Received : Nov 18 2025 | | Manuscript Accepted : Dec 30 2025 |
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