Review of Economic Studies (2000) 67, 47–56 0034-6527y00y00030047$02.

00
 2000 The Review of Economic Studies Limited

Noisy Contagion Without

Mutation
IN HO LEE and ÁKOS VALENTINYI
University of Southampton

First version received August 1997; final version accepted June 1999 (Eds.)

In a local interaction game agents play an identical stage game against their neighbours
over time. For nearest neighbour interaction, it is established that, starting from a random initial
configuration in which each agent has a positive probability of playing the risk dominant strategy,
a sufficiently large population coordinates in the long-run on the risk dominant equilibrium almost
surely. Our result improves on Blume (1995), Ellison (2000), and Morris (2000) by showing that
the risk dominant equilibrium spreads to the entire population in a two dimensional lattice and
without the help of mutation, as long as there is some randomness in the initial configuration.

1. INTRODUCTION
It is a fascinating task to explain how a convention develops in a society. The uniformity
of a certain choice of behaviour is surprising given that the number of agents involved is
large and that there appears to be no obvious coordination mechanism. Recent game
theoretic research addresses the issue relying on the tools developed in the theory of
stochastic processes.1 Kandori, Mailath and Rob (1993), (henceforth KMR), and Young
(1993) establish that the risk dominant equilibrium due to Harsanyi and Selten (1988) is
selected in 2B2 coordination games.
These papers argue that a small probability of mutation (representing mistakes and
experimentation) suffices for the unique selection of the risk dominant equilibrium. In a
large society, this approach may be unsatisfactory since a switch to the risk dominant
equilibrium requires many simultaneous mutations. For this reason it seems safe to con-
clude that the initial configuration of strategy chosen by the majority of population deter-
mines the convention for any meaningful length of time. Ellison (1993, 2000) offers a
solution by considering local instead of global interaction. Since it is easier to have a few
mutations occurring at different locations over time than many mutations simultaneously
across the whole population, a convention will emerge in a shorter period of time in an
environment with local interaction. Moreover, local interaction is also a more realistic
mechanism since it is rare for agents to interact with the whole population, or even some
significant fraction of it.
This paper shows that a large population with only local interaction exhibits a strong
tendency to coordinate on the risk dominant equilibrium even in the absence of mutation.
For the determination of the long-run equilibrium, we rely on a contagion mechanism
that exploits the randomness in the initial strategy choice of agents. The major result is
that the contagion threshold is exactly 1y2 for a large population even when the probability
of initially playing the risk dominant action vanishes to zero. The present approach

1. Friedlin and Wentzell (1984) provide a good account of this theory.

47

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48 REVIEW OF ECONOMIC STUDIES

improves previous results by Blume (1995), Ellison (2000), and Morris (2000) in a non-
trivial way. These authors conclude that the contagion threshold is strictly less than 1y2
in 2-dimensional lattices. However, they consider only the noise-free mechanism where
the risk-dominant equilibrium propagates from one small group of agents. Therefore, our
result suggests that the contagion mechanism is much more powerful than previously
thought.
Consider a local interaction game whose stage game is the 2B2 coordination game
played by a population of agents. The agents are located on a 2-dimensional lattice and
interact with their nearest neighbours. Agents are boundedly rational in that they play
the myopic best response to the strategies played by their immediate neighbours. Instead
of relying on mutation along the play, we assume that the initial strategy choice of the
agents is random.2 Once the initial choice is made, there is no further muddling through.
Since there is no noise in the choice of action, the response dynamic is deterministic.
Clearly, the two strategies can initially be assigned to the agents so that the popu-
lation eventually coordinates on the risk dominant one.3 The question of importance,
however, is whether such a coordinated configuration occurs when individuals choose
their initial strategy randomly. We show that it does almost surely in a large population.
The intuition can be explained as follows. Suppose that there is a region on the lattice
where agents presently play the risk dominant strategy. Agents will continue to play the
risk dominant strategy within that region. Moreover, the region will grow if there are
some agents who play the risk dominant strategy immediately next to its boundary. The
number of agents next to that region who are required to play the risk dominant strategy
for further propagation to occur turns out to be small, and independent of the size of the
region. This ensures that some coordinated configurations will occur with positive prob-
ability independently of the size of the population. Finally, the spatial homogeneity of the
lattice implies that coordinated configurations are simply translations of each other. A
large population then ensures that one of these occurs almost surely.
Earlier papers show that, first, the risk dominant action spreads in one dimension,
but not in two (see Ellison (1993)); secondly, non-trivial mixed long-run equilibria exist
in two dimensions, but not in one (see Blume (1995) and Anderlini and Ianni (1996)). One
might be tempted to conclude that contagion relies on the absence of such non-trivial
long-run equilibria as Morris (2000) shows more generally. We show that this link between
contagion and the existence of mixed equilibria is broken when we allow randomness in
the initial conditions.
It also appears that the intuition explained above can be applied to even more general
environments including a higher dimensional lattice and a larger interaction range. For
instance, the construction of a stable team (Blume (1995)) that plays the risk dominant
strategy in a larger interaction range enables us to extend our argument in a straight-
forward fashion to translation-invariant neighbourhoods on a 2-dimensional lattice.
The paper is organized as follows. Section 2 formulates a local interaction game on
the 2-dimensional lattice for nearest neighbour interaction. Section 3 contains the main
result on the long-run distribution of the local interaction game for the best-response
strategy dynamic. For comparison, it also demonstrates how the noise-free contagion
mechanism works. Section 4 concludes.
2. The random initial strategy choice is a natural initial condition. We do not want to speculate about the
source of this noise because our results are not sensitive to it. This is in contrast to the sensitivity of the result
in other approaches such as KMR and Young (1993) to the relative sizes of the mutation probability, pointed
out by Bergin and Lipman (1996) and Binmore and Samuelson (1997). The sensitivity of such approaches calls
for a theory of the mutations.
3. A trivial assignment is when all agents play the risk dominant strategy.

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 LEE & VALENTINYI NOISY CONTAGION 49

2. THE MODEL
2.1. A framework of local interaction
There is a population of N 2 agents located on the two dimensional torus Λ(N ) ≡
{−Ny2∫, . . . , 0, . . . , (NA1)y2∫}2 with Nn1 being an integer, and where ·∫ denotes the
integer part of the expression within the brackets. An agent with address x∈Λ(N ) interacts
with her nearest neighbours. The set of neighbours of the origin is defined by
N ≡ {y: uuyuuG1} where uuyuu ≡ (uy1 uCuy2 u), and the set of neighbours of agent x is given
by xCN ≡ {y: uuxAyuuG1}; thus the translation of N by x is denoted by xCN .
There are two strategies {A, B} for agent x∈Λ(N ). Let s: Λ(N ) → {A, B} be a map;
then s(x) gives the state of agent x while s describes the state of the whole population.
Finally let Zt be the set of agents playing strategy A in period t,
Zt G{x: st (x)GA}. (1)

2.2. A coordination game

Consider the 2B2 coordination game given in Table 1. We require that aHc, dHb and
(aAc)H(dAb) so that both (A, A) and (B, B) are Nash equilibria and (A, A) is the risk
dominant one.

TABLE 1

Coordination Game

A B
A a, a b, c
B c, b d, d

All agents play the game simultaneously in discrete time. Local interaction is captured
by restricting the dependence of the payoff of each agent to the strategies played by herself
and the agents in her neighbourhood. Let

uZt ∩(xCN )u
θ t (x) ≡ , (2)
uxCN u
where u·u denotes the cardinality of a set.4 In words, θ t (x): Λ(N ) → {0, 14 , 12 , 34 , 1} is the
fraction of x’s neighbours playing strategy A. Then the payoff of agent x from playing
strategy A in period t is given by
ut (x, A)Gθ t (x)aC(1Aθ t (x))b. (3)
Similarly, the payoff of agent x from playing strategy B in period t is given by
ut (x, B)Gθ t (x)cC(1Aθ t (x))d. (4)
Agents are assumed to play a myopic best-response. Agent x in period tC1 chooses
stC1 (x)Garg max {ut (x, A), ut (x, B)}, (5)
{A,B}

4. For instance, uxCN uG4.

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50 REVIEW OF ECONOMIC STUDIES

where in the case of indifference the risk dominant strategy A is chosen.5 This implies that
agent x plays strategy A in period tC1 if

dAb
θ t (x)n ≡ θ̂ . (6)
(aAc)C(dAb)

Since (A, A) is the risk dominant equilibrium, θ̂ F1y2. The evolutiion of the popu-
lation st can be described in terms of the state of agent x as

A if θ t (x)n θ̂ ,
stC1 (x)G 5B otherwise.
(7)

Thus, x chooses A if and only if at least a share θ̂ of his neighbours plays A.

3. BEST RESPONSE DYNAMICS

3.1. Noise-free contagion6

Previous studies of local interaction games in the absence of mutation have focused on
the problem of finding conditions for the risk dominant strategy to spread out from one
group of agents initially playing it. We call this propagation mechanism ‘‘noise-free con-
tagion’’ since randomness of any form is absent.
The clearest example of how this mechanism works is due to Ellison (1993). He
considers a local interaction system of dimension one. A finite number of agents are placed
around a circle; each agent interacts with its two nearest neighbours on either side. If at
least one of the neighbours played the risk dominant strategy in a period, the agent plays
the risk dominant strategy in the next. It is easy to see that two consecutive agents playing
the risk dominant strategy in a period suffice for coordination on the risk dominant equi-
librium by the whole population: these two agents never switch to the risk dominated
strategy, and their neighbours switch to the risk dominant strategy and continue to play
it forever. This result holds true for any risk dominant strategy which requires for adop-
tion at most half of the neighbours to play it: such a strategy is termed 12 -dominant
strategy.
As Morris (2000) shows, the previous result extends to more general environments
only for thresholds strictly less than 12 . As an example, consider a 2-dimensional torus.
Agents interact with all neighbours that are located within the Euclidean distance of 1. In
this case, if the risk dominant strategy is to spread from any one agent playing it initially,
the threshold needs to be less than or equal to 14 . To see the reason, suppose that two
agents, who are neighbours, play the risk dominant strategy initially. They will continue
to play it while the six agents that have either of them as one of their four neighbours
will switch to the risk dominant strategy. If it required more than 14 of the neighbours to
switch to the risk dominant strategy, the propagation mechanism stops working.7 Morris
computes that the maximum threshold is n(2nC1)mA1y((2nC1)mA1) for a local interac-
tion system of dimension m and a box neighbourhood of interaction range n.

5. This tie-breaking rule plays little role except for the knife-edge case of 12 -dominance.
6. For the detail of the mechanism, refer to Morris (2000).
7. The importance of 14 in two dimensional lattices is due to Blume (1995).

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 LEE & VALENTINYI NOISY CONTAGION 51

3.2. Noisy contagion without mutation

The noise-free contation mechanism requires the possibility that a group of neighbouring
agents induces other agents to switch to the risk dominant strategy solely due to the
contacts among them. As we show next, propagation can be achieved without relying on
this ‘‘self-growing’’ mechanism. If we can find more than two neighbouring groups of
agents playing initially the risk dominant strategy so that their interactions induce further
agents to switch, the propagation may continue even if each group of agents alone cannot
induce the switching of neighbours. We demonstrate that such a favourable condition can
be ensured if the population starts from a random initial state.8 Since the adoption process
is noisy due to the initial randomness, we call this propagation mechanism ‘‘noisy
contagion’’.
It is already known that propagation is most difficult for nearest neighbour interac-
tion due to the discreteness of the lattice structure. Therefore, focusing on nearest neigh-
bour interaction provides a particularly strong result. We shall show that the noisy
contagion mechanism improves the contagion threshold from 14 in the noise-free case
to 12 .9
Let each individual play initially strategy A with probability p, and strategy B with
probability (1Ap), independent of strategies played by the other agents in period 0. The
state of the population at some time tH0 is described by a distribution on the product
space {A, B}Λ(N) or by Zt .
The main goal of our analysis is to determine which strategy is selected in the long
run. In particular, we are interested in the probability, R(N, p), that the population of size
N coordinates on the risk dominant strategy conditional on the initial distribution p:

1
R(N, p) ≡ Pr lim st (x)GA, ∀x∈Λ(N ) p .
t→S
*2 (8)

Our first proposition characterizes this probability as a function of p.

Proposition 1. For a given population size N the probability that the population eventu-
ally coordinates on the risk dominant strategy is monotonically increasing in p.

Proof. First, we construct an initial state. Assign a random number drawn indepen-
dently from the uniform distribution on the unit interval to each agent. For agent x denote
this number by λ (x). Now pick a p∈[0, 1], and let

A if λ (x)Fp,
s0 (xup)G 5B if λ (x)np,
for all x∈Λ(N ). This construction ensures that agents play the risk dominant strategy
with probability p. Moreover, the construction implies that if s0 (xup)GA then s0 (xup′)G
A for any p′np. That is, all agents playing A in the initial configuration generated by p
play A in the initial configuration generated by any p′np. Thus it suffices to show that if

8. We note that Blume (1995) already studied the case of the random initial conditions. However, he
showed that if the population is large enough, then a small initial density ensures the existence of an initial
seed of agents playing A which, for a low threshold, can grow without relying on further noise in the initial
configuration.
9. We use methods first suggested by van Enter (1987) and developed further by Aizenman and Lebowitz
(1988) and Schonmann (1990, 1992).

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52 REVIEW OF ECONOMIC STUDIES

Z0 ( p)⊂Z0 ( p′), then R(N, p)oR(N, p′) where Z0 ( p) is the initial configuration generated
under p according to the construction.
Observe that the best-response strategy dynamic is monotone in the sense that the
risk dominant strategy is chosen if and only if at least half of the neighbours play it. This
means that if we switch some agents from B to A in a given configuration, then at least
as many agents adopt the risk dominant strategy in the next period under the modified
configuration as under the original one. Therefore Z0 ( p)⊂Z0 ( p′) implies Z1( p)⊂Z1( p′).
By an induction argument, we obtain that if Z0 ( p)⊂Z0 ( p′), then Zt ( p)⊂Zt ( p′) for all
tn0. Consequently, R(N, p)oR(N, p′), which proves our claim. uu

Since R(N, p) is monotone in p, the key question is to find the critical initial density
so that the population coordinates on the risk dominant strategy; thus, pc G
inf {p: limN → S R(N, p)G1}. The main result of our paper is to show that pc G0. Although
the proof is lengthy, the basic idea is simple. There is a set of configurations that eventually
lead to the adoption of the risk dominant strategy. Call an element of this set a coordinated
configuration. We do not intend to characterize the entire set. Instead a subset of the
coordinated configurations will be identified which is relatively easy to analyse. Finally, it
is shown that a coordinated configuration almost surely occurs in a large population.
First some preparatory work is needed for our proof. To simplify the problem we
renormalize the original population in order to eliminate switches from A to B. Suppose
that N is even.10 Divide the torus Λ(N ) into squares of side length 2:

T ( y)G{x∈Λ(N ): xi ∈{2yi , 2yiC1}, iG1, 2, y∈Λ(M )}, (9)

where M ≡ Ny2. In the renormalized population y refers to a group of four agents called
a team. Define

A if st (x)GA ∀x∈T ( y),

η t ( y)G 5B otherwise.
(10)

Thus, a team is said to play A (η t ( y)GA) if and only if all team members play A. Observe
that if a team plays A none of its members ever adopts B. Moreover, a team playing B
adopts A if two neighbouring teams play A in two different coordinate directions. Such a
propagation takes at most three periods. It follows that the inequality
4u{y: η t ( y)GA, y∈Λ(Ny2)}uou{x: st (x)GA, x∈Λ(N )}u, (11)
holds for all t. Let RT (M, q) be the probability that the renormalized population of size
M2 G(Ny2)2 coordinates on A given the initial distribution q where qGp4. The inequality
(11) implies that
R(N, p)nRT (M, q) ≡4RT (Ny2, p4). (12)
Therefore it is sufficient to show that the renormalized population coordinates on the risk
dominant strategy.
We now prove our main result in the following theorem.

10. The argument applies also to odd N as well. This is because if the population on Λ(N ) is coordinated
on A, so is the population on Λ(NC1). To see this, suppose that all agents play A on Λ(N ). Construct Λ(NC1)
by adding a row and a column of agents of length NC1 to Λ(N ) such that all new agents play B. The geometry
of the torus imples that agents playing A keep playing it forever. Moreover, all agents playing B will have two
neighbours playing A. Therefore, it will be the best response for all agents playing B to switch to A. That is
limN → S R(N, p)G1 implies limN → S R(NC1, p)G1.

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 LEE & VALENTINYI NOISY CONTAGION 53

Theorem 1. If θ̂ F1y2, then

5
pc Ginf p: lim R(N, p)G1 G0.
N→S
6 (13)

Thus, a sufficiently large population almost surely coordinates on the risk dominant strategy
starting from any initial distribution with positive density p.

Proof. By the inequality (12), it is sufficient to show that the population of teams
coordinates on the risk dominant strategy. We carry out the proof in three steps. First,
we construct a particular class of coordinated configurations centred at the origin. Sec-
ondly, we show that the probability that our coordinated configuration occurs is strictly
positive for any qH0, and is independent of the size of the population. Thirdly, we prove
that in a sufficiently large population a coordinated configuration centred at some team
will almost surely occur for any qH0.
Step 1. Denote the set of coordinated configurations for Λ(M ) by CM

CM G 5η : lim η ( y)GA,
0
t→S
t ∀y∈Λ(M ) . 6
We construct now a particular coordinated configuration η̂ . Suppose that M is odd.
Let Γ(k) be the square of side length 2kC1 centred at the origin of Λ(M ), that is,
Γ(k) ≡ {y∈Λ(M ): uyi uok, i∈{1, 2}, 1oko(MA1)y2}.
In addition define Γ(0)G{(0, 0)}, that is, the origin. Let F(k, l) be the l-th face of the kth
square, that is, for each kG1, 2, . . . , (MA1)y2, and lG1, 2, 3, 4,
F(k, l) ≡ {y∈Γ(k)⊂Γ(kA1): yil Gal k, 1olo4,}, (14)
where (·) denotes the complementary set and a1 Ga3 G1, a2 Ga4 G−1, i1 Gi2 G1 and i3 G
i4 G2. Finally, let

η̂ ∈ĈM ≡ {η : ∃y∈F(k, l), η ( y)GA, 1okoMy2, 1olo4}. (15)

Thus, η̂ is a configuration with the property that there is at least one team playing the
risk dominant strategy on each face of each of the (MA1)y2 squares and ĈM is a set of
such configurations.
Now we show by induction that η̂ as constructed above is a coordinated configur-
ation and that ĈM is the set of coordinated configurations centred at the origin. Suppose
that the team at the origin Γ(0) plays A. Furthermore suppose that there is at least one
team playing A on each face of the square Γ(1), and there are at most four teams in F(1, l)
not playing A. It is clear that each of the teams eventually will see two other teams in
each coordinate direction playing A. Therefore all y∈F(1, l ) adopt A.
Suppose now that η ( y)GA for all y∈Γ(kA1) and a team at ( yi , k) for yi ∈
{−k, . . . , k} plays A. Since all teams ( yj , kA1) for yj ∈{−(kA1), . . . , (kA1)} play A, the
team ( yj , k) encounters two teams in each coordinate direction playing A and so adopts
A. The argument can be repeated for (−yi , k) and so on. Thus, all y∈F(k, l) for each
1olo4 adopts A.11 In particular we conclude that ĈM ⊂ CM .

11. Ellison (2000) anticipated our argument to some extent by showing that the risk dominant action
would spread from a cross, which is an example of the configuration we have just described.

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54 REVIEW OF ECONOMIC STUDIES

Step 2. Let Pr (ĈM uq) denote the probability of the event that coordinated configur-
ations occur centred at the origin as described in Step 1. We show that Pr (ĈM uq)n
α (q)H0, for qH0, independent of the size of the population. We have

Pr (ĈM uq)G∏i G0 (1A(1Aq)2iC1 )4 Gexp (4 ∑i G0

(MA1)/2 (MA1)/2
ln (1A(1Aq)2iC1))

1 1 22 ,
(1Aq)(2iC1) j
Gexp −4 ∑i G0 (1Aq)2iC1C∑ j G2
(MA1)/2 S

j
where the second line follows from the fact that Aln (1Ax)G∑ j G1 xjyj. Since there is a
S

constant 0FCFS independent of i such that12

(1Aq)(2iC1)j S (1Aq)
(2iC1) j

∑ j G2 o ∑ j G2
S
,
j C
the above equation can be rewritten as

1 1 22
(1Aq)2(2iC1) S
Pr (ĈM uq)nexp −4 ∑i G0 ∑ j G2 (1Aq)
(MA1)/2
(1Aq)2iC1C (2iC1)( jA2)

1 1 2 2
1 (1Aq)2iC1
Gexp −4 ∑i G0
(MA1)/2
1C 2iC1
(1Aq)2iC1
C 1A(1Aq)

1 1 2 2
1 1Aq (MA1)/2
nexp −4 1C ∑i G0 (1Aq)
2iC1

C q

1 1 2(1Aq) ∑ 2
1C(1Aq)C
Gexp −4
(MA1)/2
i G0
((1Aq)2)i
qC

1 1q2 2
1C(1Aq)C 1Aq 1A(1Aq)MA1
Gexp −4
C 1A(1Aq)2

1 2
1CC 1 1
nexp −4 ≡ α (q). (16)
C q q(2Aq)
Thus, we have shown that the probability of the event that a coordinated configuration
centered at the origin occurs is bounded away from zero by α (q)H0 for any qH0 where
α (q)H0 is independent of MH1.
Step 3. We have shown so far that there is a coordinated configuration centred at
the origin which occurs with strictly positive probability. The main idea of the next step
is based on the fact that if we divide the population into disjoint squares, each of these
squares can be coordinated independently from each other. Since a large population can
be divided into a large number of such regions, one of these regions will almost surely be
coordinated. Moreover, if the side length of a region is large, then this region will almost
surely grow further because there will be a team on each of its sides.
Let M be any integer such that MGm2 for some odd integer m. This allows us to
partition the torus into m2 disjoint squares of side length m. We say that a given square
of side length m is coordinated if eventually all agents within that square play the risk

12. The inequality clearly holds for CG2. However, there may exist another value of C which gives a
tighter bound for the left-hand side. Therefore we will use the symbol C for such a constant.

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 LEE & VALENTINYI NOISY CONTAGION 55

dominant strategy. Let Cm be the event that there is a square of side length m on the torus
somewhere that is coordinated. Finally, let Gm be the event that every row or column of
length m in Λ(M ) contains at least one team playing A.
First, recall that CM is the event that the torus Λ(M ) is coordinated; thus RT(M, q)G
Pr (CM uq). Next observe that Pr (CM u Cm ∩Gm)G1. Since Cm occurred, we know that there
is a square of side length m somewhere on the torus that is coordinated. Since Gm implies
that there will be a team playing A on each face of the coordinated square, there will be
at least one square of side length mC1 which is coordinated. We obtain by induction that
if both Cm and Gm occur then the whole torus is coordinated. It follows that

RT (M, q)nPr (Cm ∩Gm ),

implying that

1ART(M, q)oPr (Cm ∩Gm )GPr (Cr m ∪G

r m )oPr (Cr m )CPr (G
r m ). (17)
Now we estimate the probabilities on the right hand side.
First, consider C̄m , there is no square of side length m in Λ(M ) which is coordinated.
The probability that a square is not coordinated is bounded above by 1Aα (q), implying
that the probability that none of them is coordinated under a given partition is bounded
above by (1Aα (q))(M/m) . Since we can partition the torus at most m2 different ways, we
2

obtain

Pr (Cr m)om2(1Aα (q))(M/m) .

2
(18a)
r m , that there is no row or column of length m on the
Second, consider the event G
torus containing a team playing A. The probability that there is no team playing A in a
given row or a column of length m is given by (1Aq)m. Moreover, the number of such a
columns or rows in Λ(M ) is at most 2M2, implying that
r m )o2M2(1Aq)m.
Pr (G (18b)
Consequently, equation (17) can be restated as
1ART(M, q)om2(1Aα (q))(M/m) C2M2(1Aq)m.
2
(19)
n x 13
Notice that for a fixed and finite n and aF1, limx → S x a G0. Rewriting equation
(19) in terms of m (since MGm2), we get
1ART(M, q)om2(1Aα (q)) m C2m4(1Aq)m.
2
(20)
As m↑S, both terms on the right-hand side converge to zero, since they are of the
form xnax which converges to zero as x tends to infinity. Thus, we have shown that
limM → S RT(M, q)G1 for any qH0.
Consider now the case where M≠m2 for some odd m. Then, let m be the largest odd
integer less than or equal to √M, thus,
√MA1
mG2 3 2 4C1.
Clearly, m2 squares of side length m can be placed on the torus so that no squares overlap.
Since the squares are disjoint, and Pr (CM u Cm ∩Gm )G1 still holds, the same argument
applies. uu

13. For a proof, apply L’Hôpital’s rule to xny(1ya)x.

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4. CONCLUDING REMARKS
This paper shows that up to 12 -dominance, the risk dominant equilibrium is selected with
probability 1 by a large population starting with a random initial configuration. The result
holds for any size of initial noise, indicating that the risk dominant equilibrium is far
more robust than the payoff dominant equilibrium in spite of the collective rationality
argument of Harsanyi and Selten (1988) in favour of the latter. Indeed experimental
results in van Hyuck, Battalio and Beil (1990, 1991) provide evidence supporting our con-
clusion, since the risk dominant equilibrium was always selected in their experiments.

Acknowledgements. The paper was previously titled ‘‘Interactive Contagion’’. We thank Berthold Herren-
dorf, Robin Mason, Tom Mountford, seminar participants at Berkeley, Birkbeck, Humboldt University, Univer-
sity of Hamburg, the editor, and especially Stephen Morris for helpful comments. The first author acknowledges
financial support from ESRC Research Fellowship. Remaining errors are ours.

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