Strategic Interaction and Conventions
AbstractThe scope of the paper is to review the literature that employs coordination games to study social norms and conventions from the viewpoint of game theory and cognitive psychology. We claim that those two alternative approaches are complementary, as they provide different insights to explain how people converge to a unique system of self-fulfilling expectations in presence of multiple, equally viable, conventions. While game theory explains the emergence of conventions relying on efficiency and risk considerations, the psychological view is more concerned with frame and labeling effects. The interaction between these alternative (and, sometimes, competing) effects leads to the result that coordination failures may well occur and, even when coordination takes place, there is no guarantee that the convention eventually established will be the most efficient.
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Bibliographic InfoPaper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number 10/09.
Length: 14 pages
Date of creation: 01 Oct 2010
Date of revision:
Behavioral Game Theory; conventions; social norms;
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
- NEP-CBE-2010-10-16 (Cognitive & Behavioural Economics)
- NEP-EXP-2010-10-16 (Experimental Economics)
- NEP-GTH-2010-10-16 (Game Theory)
- NEP-NEU-2010-10-16 (Neuroeconomics)
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