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The Evolution of Conventions under Incomplete Information

Author

Listed:
  • Mogens Jensen

    (Institute of Economics, University of Copenhagen)

  • Birgitte Sloth

    (Institute of Economics, University of Copenhagen)

  • Hans Jørgen Whitta-Jacobsen

    (Institute of Economics, University of Copenhagen)

Abstract

We formulate an evolutionary learning process with trembles for static games of incomplete information. For many games, if the amount of trembling is small, play will be in accordance with the games' (strict) Bayesian equilibria most of the time supporting the notion of Bayesian equilibrium. Often the process will select a specific equilibrium. We study an extension to incomplete information of the prototype conflict known as "Chicken" and find that the equilibrium selection by evolutionary learning may well be in favor of inefficient Bayesian equilibria where some types of players fail to coordinate.

Suggested Citation

  • Mogens Jensen & Birgitte Sloth & Hans Jørgen Whitta-Jacobsen, "undated". "The Evolution of Conventions under Incomplete Information," Discussion Papers 03-12, University of Copenhagen. Department of Economics, revised Mar 2003.
    • Handle: RePEc:kud:kuiedp:0312
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    Cited by:

    1. Cabrales, Antonio & Serrano, Roberto, 2011. "Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms," Games and Economic Behavior, Elsevier, vol. 73(2), pages 360-374.
    2. Saran, R.R.S. & Serrano, R., 2010. "Ex-Post regret learning in games with fixed and random matching: the case of private values," Research Memorandum 032, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    3. Saran, Rene & Serrano, Roberto, 2014. "Ex-post regret heuristics under private values (I): Fixed and random matching," Journal of Mathematical Economics, Elsevier, vol. 54(C), pages 97-111.
    4. Rene Saran & Roberto Serrano, 2007. "The Evolution of Bidding Behavior in Private-Values Auction and Double Auctions," Working Papers 2007-01, Brown University, Department of Economics.
    5. Rene Saran & Roberto Serrano, 2007. "The Evolution of Bidding Behavior in Private-Values Auctions and Double Auctions," Working Papers wp2007_0712, CEMFI.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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