Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263775 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9845
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
In this paper we model the interaction between leaders, their followers and crowd followers in a coordination game with local interaction. The steady states of a dynamic best-response process can feature a coexistence of Pareto dominant and risk dominant actions in the population. The existence of leaders and their followers, plus the local interaction, which leads to clustering, is crucial for the survival of the Pareto dominant actions. The evolution of leader and crowd followership shows that leader followership can also be locally stable around Pareto dominant leaders. The paper answers the questions (i) which Leader should be removed and (ii) how to optimally place leaders in the network to enhance payoff dominant play.
Subjects: 
coordination games
leaders
followers
evolution
JEL: 
C70
D85
Document Type: 
Working Paper
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