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Competition among Conventions

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Author Info
Joerg Oechssler (Columbia University)

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Abstract

A convention can be seen as the standard way of playing a game. If different conventions exist in various geographical, social or other entities (called "towns") and if there is some mobility between these towns, which conventions, if any, will emerge as the successful ones? A simple evolutionary process is suggested and it is shown that the process converges to a Nash equilibrium for all games satisfying weak acyclity or a condition called evolutionary stable with respect to pure strategies (ESPS). Further, if the process converges, it converges to an efficient convention for all games in which the Pareto optimal symmetric equilibria are strict. Hence, the paper presents an explanation for the endogenous evolution of efficiency. In contrast to most recent studies in evolutionary game theory, the conclusions do not rely on random "mutations". Instead, the driving force is the tendency of players to have increased interaction with member of their own group (viscosity).

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Publisher Info
Paper provided by EconWPA in its series Game Theory and Information with number 9312001.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 21 pages
Date of creation: 02 Dec 1993
Date of revision: 04 Dec 1993
Handle: RePEc:wpa:wuwpga:9312001

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Find related papers by JEL classification:
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
D8 - Microeconomics - - Information, Knowledge, and Uncertainty

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384.
  2. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-71, September. [Downloadable!] (restricted)
  3. Canning, D., 1992. "Learning Language Conventions in Common Interest Signaling Games," Discussion Papers 1992_22, Columbia University, Department of Economics.
  4. Robson, A.J., 1989. "Efficiency In Evolutionary Games: Darwin, Nash And Secret Handshake," Papers 89-22, Michigan - Center for Research on Economic & Social Theory.
  5. Nalebuff, B. & Caplin, A., 1992. "Competition Among Institutions," Discussion Papers 1992_36, Columbia University, Department of Economics.
    Other versions:
  6. Joel Sobel, 1993. "Evolutionary Stability and Efficiency," University of California at San Diego, Economics Working Paper Series 93-17, Department of Economics, UC San Diego.
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  7. Akihiko Matsui, 1989. "Cheap Talk and Cooperation in the Society," Discussion Papers 848, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  8. Aumann, Robert J. & Sorin, Sylvain, 1989. "Cooperation and bounded recall," Games and Economic Behavior, Elsevier, vol. 1(1), pages 5-39, March. [Downloadable!] (restricted)
  9. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January. [Downloadable!] (restricted)
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  10. Noeldecke,Georg & Samuelson,Larry, . "An evolutionary analysis of backward and forward induction," Discussion Paper Serie B 228, University of Bonn, Germany.
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  11. Myerson, Roger B. & Pollock, Gregory B. & Swinkels, Jeroen M., 1991. "Viscous population equilibria," Games and Economic Behavior, Elsevier, vol. 3(1), pages 101-109, February. [Downloadable!] (restricted)
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  12. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January. [Downloadable!] (restricted)
  13. Matsui, Akihiko, 1991. "Cheap-talk and cooperation in a society," Journal of Economic Theory, Elsevier, vol. 54(2), pages 245-258, August. [Downloadable!] (restricted)
  14. repec:fth:coluec:607 is not listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jeffrey Ely, 2002. "Local Conventions," Advances in Theoretical Economics, Berkeley Electronic Press, vol. 2(1), pages 1044-1044. [Downloadable!] (restricted)
    Other versions:
    • Jeffrey C. Ely, 2002. "Local Conventions," Discussion Papers 1349, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  2. Joerg Oechssler, 1994. "An Evolutionary Interpretation Of Mixed-Strategy Equilibria," Game Theory and Information 9404001, EconWPA. [Downloadable!]
    Other versions:
  3. Joerg Oechssler, 1994. "Decentralization and the Coordination Problem," Game Theory and Information 9403004, EconWPA. [Downloadable!]
    Other versions:
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