This paper introduces a new coordination problem for a large but finite population – The Language Game. The population is partitioned into two groups of identical agents. Each player shares a common two-action strategy set and interacts pairwise with everyone else. Both symmetric profiles are Pareto-efficient strict equilibria, but the groups rank them differently. The profile where successful coordination occurs only within-group, with each group adopting their most preferred equilibrium action, is also an equilibrium provided the smaller groupʼs preferences are sufficiently strong. In all dynamically stable long-run outcomes, players in the same group adopt the same action. Three properties, that do not matter for equilibrium selection in standard homogeneous agent models, do matter in the Language Game. These are: group size, strength of group preferences, and rates of group adaptiveness (“group dynamism”). A relative increase in group size and group dynamism is always weakly beneficial.
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.:
- Kim, Y.G. & Sobel, J., 1993.
"An Evolutionary Approach to Pre-Play Communication,"
93-02, University of Iowa, Department of Economics.
- Kim, Yong-Gwan & Sobel, Joel, 1995. "An Evolutionary Approach to Pre-play Communication," Econometrica, Econometric Society, vol. 63(5), pages 1181-93, September.
- Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993.
"Learning, Mutation, and Long Run Equilibria in Games,"
Econometric Society, vol. 61(1), pages 29-56, January.
- M. Kandori & G. Mailath & R. Rob, 1999. "Learning, Mutation and Long Run Equilibria in Games," Levine's Working Paper Archive 500, David K. Levine.
- Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers 71, Princeton, Woodrow Wilson School - John M. Olin Program.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
- Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-31, March.
- José Canals & Fernando Vega-Redondo, 1998. "Multi-level evolution in population games," International Journal of Game Theory, Springer, vol. 27(1), pages 21-35.
- Blume Lawrence E., 1993.
"The Statistical Mechanics of Strategic Interaction,"
Games and Economic Behavior,
Elsevier, vol. 5(3), pages 387-424, July.
- L. Blume, 2010. "The Statistical Mechanics of Strategic Interaction," Levine's Working Paper Archive 488, David K. Levine.
- Jean-Paul Carvalho, 2010. "Coordination and Culture," Economics Series Working Papers 489, University of Oxford, Department of Economics.
- Daniel Friedman, 1998.
"On economic applications of evolutionary game theory,"
Journal of Evolutionary Economics,
Springer, vol. 8(1), pages 15-43.
- Daniel Friedman, 2010. "On Economic Applications of Evolutionary Game Theory," Levine's Working Paper Archive 53, David K. Levine.
- Peski, Marcin, 2010. "Generalized risk-dominance and asymmetric dynamics," Journal of Economic Theory, Elsevier, vol. 145(1), pages 216-248, January.
- J Bergin & B L Lipman, 1997.
"Evolution with state-dependent Mutations,"
Levine's Working Paper Archive
771, David K. Levine.
- BERGIN, James & LIPMAN, Bart, 1994. "Evolution with State-Dependent Mutations," CORE Discussion Papers 1994055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- J. Bergin & B. Lipman, 2010. "Evolution with State-Dependent Mutations," Levine's Working Paper Archive 486, David K. Levine.
- Arthur J Robson & Fernando Vega-Redondo, 1999.
"Efficient Equilibrium Selection in Evolutionary Games with Random Matching,"
Levine's Working Paper Archive
2112, David K. Levine.
- Robson, Arthur J. & Vega-Redondo, Fernando, 1996. "Efficient Equilibrium Selection in Evolutionary Games with Random Matching," Journal of Economic Theory, Elsevier, vol. 70(1), pages 65-92, July.
- Ely Jeffrey C, 2002. "Local Conventions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 2(1), pages 1-32, May.
- Samuelson, Larry & Zhang, Jianbo, 1992. "Evolutionary stability in asymmetric games," Journal of Economic Theory, Elsevier, vol. 57(2), pages 363-391, August.
- David P. Myatt & Chris Wallace, 2002.
"Adaptive Play by Idiosyncratic Agents,"
Economics Series Working Papers
89, University of Oxford, Department of Economics.
- Tom Quilter, 2007. "Noise Matters in Heterogeneous Populations," ESE Discussion Papers 169, Edinburgh School of Economics, University of Edinburgh.
- Jeffrey C. Ely, 2002. "Local Conventions," Discussion Papers 1349, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Sandholm, William H., 2007. "Pigouvian pricing and stochastic evolutionary implementation," Journal of Economic Theory, Elsevier, vol. 132(1), pages 367-382, January.
- Joerg Oechssler, 1994.
"Decentralization and the Coordination Problem,"
Game Theory and Information
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- Joseph Farrell & Garth Saloner, 1985.
"Standardization, Compatibility, and Innovation,"
RAND Journal of Economics,
The RAND Corporation, vol. 16(1), pages 70-83, Spring.
- H. Peyton Young, 1996. "The Economics of Convention," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 105-122, Spring.
- Ellison, Glenn, 2000. "Basins of Attraction, Long-Run Stochastic Stability, and the Speed of Step-by-Step Evolution," Review of Economic Studies, Wiley Blackwell, vol. 67(1), pages 17-45, January.
- Glen Ellison, 2010.
"Learning, Local Interaction, and Coordination,"
Levine's Working Paper Archive
391, David K. Levine.
When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:76:y:2012:i:1:p:301-328. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.