Abstract:

In two-strategy coordination games with distinct payoff- and risk-dominant equilibria, existing results show that the inefficient risk-dominant equilibrium is uniquely selected in the infinite horizon under many evolutionary dynamics. In the above class of coordination games, we study the effect of introducing a bilingual strategy that is compatible with both of the existing strategies. An agent playing the bilingual strategy incurs an additional adoption cost but never miscordinates with any other agent. We show that if the adoption cost of the bilingual strategy is low, then the efficient payoff-dominant equilibrium can be uniquely selected not only in the infinite horizon but also in the finite horizon under many evolutionary dynamics.