IDEAS home Printed from https://ideas.repec.org/a/eee/dyncon/v91y2018icp104-119.html
   My bibliography  Save this article

Evolutionary dynamics in club goods binary games

Author

Listed:
  • Bischi, Gian Italo
  • Merlone, Ugo
  • Pruscini, Eros

Abstract

A dynamic adjustment mechanism, based on replicator dynamics in discrete time, is used to study the time evolution of a population of players facing a binary choice game with social influence, characterized by payoff curves that intersect at two interior points, also denoted as thresholds. So, besides the boundary equilibria where all players make the same choice, there are two further steady states where agents playing different strategies coexist and get identical payoffs. Such binary game can be interpreted as a club good game, in which players have to choose either joining or not the club in the presence of cost sharing, so that they can enjoy a good or a service provided that a “participation” threshold is reached. At the same time congestion occurs beyond a second higher threshold. These binary choice models, can be used (and indeed have been used in the literature) to represent several social and economic decisions, such as technology adoption, joining a commercial club, R&D investments, production delocalization, programs for environmental protection. Existence and stability of equilibrium points are studied, as well as the creation of more complex attractors (periodic or chaotic) related with overshooting effects. The study of some local and global dynamic properties of the evolutionary model proposed reveals that the presence of the “participation” threshold causes the creation of complex topological structures of the basins of coexisting attracting sets, so that a strong path dependence is observed. The dynamic effects of memory, both in the form of convex combination of a finite number of previous observation (moving average) and in the form of memory with increasing length and exponentially fading weights are investigated as well.

Suggested Citation

  • Bischi, Gian Italo & Merlone, Ugo & Pruscini, Eros, 2018. "Evolutionary dynamics in club goods binary games," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 104-119.
    • Handle: RePEc:eee:dyncon:v:91:y:2018:i:c:p:104-119
    DOI: 10.1016/j.jedc.2018.02.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165188918300745
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jedc.2018.02.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bolle, Friedel, 2014. "On a class of threshold public goods games: With applications to voting and the Kyoto Protocol," Discussion Papers 345, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    2. Dindo, Pietro, 2005. "A tractable evolutionary model for the Minority Game with asymmetric payoffs," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 355(1), pages 110-118.
    3. Cabrales, Antonio & Sobel, Joel, 1992. "On the limit points of discrete selection dynamics," Journal of Economic Theory, Elsevier, vol. 57(2), pages 407-419, August.
    4. Bischi, G. -I. & Dawid, H. & Kopel, M., 2003. "Spillover effects and the evolution of firm clusters," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 47-75, January.
    5. Pierson, Paul, 2000. "Increasing Returns, Path Dependence, and the Study of Politics," American Political Science Review, Cambridge University Press, vol. 94(2), pages 251-267, June.
    6. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    7. Bischi, Gian-Italo & Merlone, Ugo, 2010. "Binary choices in small and large groups: A unified model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(4), pages 843-853.
    8. W. Brian Arthur, 1994. "Inductive Reasoning, Bounded Rationality and the Bar Problem," Working Papers 94-03-014, Santa Fe Institute.
    9. Chiarella, C., 1991. "The birth of limit cycles in Cournot oligopoly models with time delays," Pure Mathematics and Applications, Department of Mathematics, Corvinus University of Budapest, vol. 2(2-3), pages 81-92.
    10. Chiarella, Carl & Szidarovszky, Ferenc, 2004. "Dynamic oligopolies without full information and with continuously distributed time lags," Journal of Economic Behavior & Organization, Elsevier, vol. 54(4), pages 495-511, August.
    11. Avinash Dixit, 2006. "Thomas Schelling's Contributions to Game Theory," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(2), pages 213-229, July.
    12. Liebowitz, S J & Margolis, Stephen E, 1995. "Path Dependence, Lock-in, and History," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 205-226, April.
    13. Bischi, G.-I. & Dawid, H. & Kopel, M., 2003. "Gaining the competitive edge using internal and external spillovers: a dynamic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 27(11), pages 2171-2193.
    14. Roberto Dieci & Xue-Zhong He & Cars Hommes (ed.), 2014. "Nonlinear Economic Dynamics and Financial Modelling," Springer Books, Springer, edition 127, number 978-3-319-07470-2, June.
    15. Arthur, W Brian, 1994. "Inductive Reasoning and Bounded Rationality," American Economic Review, American Economic Association, vol. 84(2), pages 406-411, May.
    16. Gian Italo Bischi & Carl Chiarella & Laura Gardini (ed.), 2010. "Nonlinear Dynamics in Economics, Finance and Social Sciences," Springer Books, Springer, number 978-3-642-04023-8, June.
    17. Richard H. Thaler, 2016. "Behavioral Economics: Past, Present, and Future," American Economic Review, American Economic Association, vol. 106(7), pages 1577-1600, July.
    18. Gian Italo Bischi & Ugo Merlone, 2017. "Evolutionary minority games with memory," Journal of Evolutionary Economics, Springer, vol. 27(5), pages 859-875, November.
    19. Chiarella, Carl & He, Xue-Zhong & Hommes, Cars, 2006. "Moving average rules as a source of market instability," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 370(1), pages 12-17.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gian Italo Bischi & Federico Favaretto & Edgar J. Sanchez Carrera, 2022. "Long-term causes of populism," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 17(1), pages 349-377, January.
    2. Arianna Dal Forno & Ugo Merlone, 2018. "Reference group influence on binary choices dynamics," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 41(2), pages 427-445, November.
    3. Sanchez-Carrera Edgar J. & Ille Sebastian & Travaglini Giuseppe, 2021. "Macrodynamic Modeling of Innovation Equilibria and Traps," The B.E. Journal of Macroeconomics, De Gruyter, vol. 21(2), pages 659-694, June.
    4. Gian Italo Bischi & Fabio Lamantia, 2022. "Evolutionary oligopoly games with cooperative and aggressive behaviors," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 17(1), pages 3-27, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
    2. Gian Italo Bischi & Ugo Merlone, 2017. "Evolutionary minority games with memory," Journal of Evolutionary Economics, Springer, vol. 27(5), pages 859-875, November.
    3. Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.
    4. Maria Minniti & William Bygrave, 2001. "A Dynamic Model of Entrepreneurial Learning," Entrepreneurship Theory and Practice, , vol. 25(3), pages 5-16, April.
    5. Ciarli, Tommaso & Ràfols, Ismael, 2019. "The relation between research priorities and societal demands: The case of rice," Research Policy, Elsevier, vol. 48(4), pages 949-967.
    6. Claudius Graebner & Jakob Kapeller, 2015. "The Micro-Macro Link in Heterodox Economics," ICAE Working Papers 37, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    7. Radi, Davide & Lamantia, Fabio & Italo Bischi, Gian, 2021. "Offshoring, Reshoring, Unemployment, And Wage Dynamics In A Two-Country Evolutionary Model," Macroeconomic Dynamics, Cambridge University Press, vol. 25(3), pages 705-732, April.
    8. Magda Fontana, 2010. "The Santa Fe Perspective on economics: emerging patterns in the science of complexity," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 18(2), pages 167-196.
    9. Arianna Dal Forno & Ugo Merlone, 2018. "Reference group influence on binary choices dynamics," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 41(2), pages 427-445, November.
    10. Schmidt, Tobias S. & Battke, Benedikt & Grosspietsch, David & Hoffmann, Volker H., 2016. "Do deployment policies pick technologies by (not) picking applications?—A simulation of investment decisions in technologies with multiple applications," Research Policy, Elsevier, vol. 45(10), pages 1965-1983.
    11. Gian Italo Bischi & Fabio Lamantia & Davide Radi, 2018. "Evolutionary oligopoly games with heterogeneous adaptive players," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume I, chapter 12, pages 343-370, Edward Elgar Publishing.
    12. Luigi Marengo & Paolo Zeppini, 2016. "The arrival of the new," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 171-194, March.
    13. Jan Fagerberg & David C Mowery & Bart Verspagen, 2009. "The evolution of Norway's national innovation system," Science and Public Policy, Oxford University Press, vol. 36(6), pages 431-444, July.
    14. Timothy J. Foxon, 2014. "Technological lock-in and the role of innovation," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 20, pages 304-316, Edward Elgar Publishing.
    15. Grazia Cecere & Nicoletta Corrocher & Cédric Gossart & Muge Ozman, 2014. "Lock-in and path dependence: an evolutionary approach to eco-innovations," Journal of Evolutionary Economics, Springer, vol. 24(5), pages 1037-1065, November.
    16. Kevin Featherstone, 2012. "Le choc de la nouvelle? Maastricht, déjà vu and EMU reform," LEQS – LSE 'Europe in Question' Discussion Paper Series 52, European Institute, LSE.
    17. Magali Malherbe & Fanny Simon-Lee, 2015. "Learning and knowledge accumulation as sources of influence for actors during path constitution: the example of the emergence of NFC technology," Post-Print hal-01597620, HAL.
    18. Vazquez, Miguel & Hallack, Michelle, 2018. "The role of regulatory learning in energy transition: The case of solar PV in Brazil," Energy Policy, Elsevier, vol. 114(C), pages 465-481.
    19. Aggio, Gustavo de Oliveira, 2011. "Emergência de convenções sociais - Uma análise a partir da simulação de interações descentralizadas caracterizadas pela disposição a imitação de comportamento," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 65(1), March.
    20. Jean‐Philippe Vergne & Rodolphe Durand, 2010. "The Missing Link Between the Theory and Empirics of Path Dependence: Conceptual Clarification, Testability Issue, and Methodological Implications," Journal of Management Studies, Wiley Blackwell, vol. 47(4), pages 736-759, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:91:y:2018:i:c:p:104-119. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jedc .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.