New research on naive learning in networks

Together with Zhengzheng Pan I am working on how naive economic decision makers operate in complex, multi-layer network structures. In the updated paper that I posted on the game theory research page, we consider how decision makers interact in a network and at the same time observe other decision makers in a separate, but correlated interaction structure. Our main result is that behavioral islands form and that in each of those islands there emerge local conventions. If we add stubborn or persistent individuals, they have an extraordinary large effect on the local conventions that emerge in the behavioral islands that they are member of. All in all, rather interesting insights from a straightforward model that is founded on boundedly rational behavior rather than fully rational optimization.