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...

It is well known that economies of scale that are external to the individual decision makers can lead to self-fulfilling prophecies and the multiplicity or even indeterminacy of equilibrium. We argue that the importance of this source of multiplicity and indeterminacy is overstated in...