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What constitutes a convention? Implications for the coexistence of conventions

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  • Ivar Kolstad

Abstract

A model of repeated play of a coordination game, where stage games have a location in social space, and players receive noisy signals of the true location of their games, is reviewed. Sugden (1995) suggests that in such a model, there can be a stationary state of convention coexistence only if interaction is non-uniform across social space. This paper shows that an alternative definition of conventions, which links conventions to actions rather than expectations, permits convention coexistence when interaction is uniform. To assess robustness, the concept of a global mutant is introduced, to which certain states of coexistence are robust.

Suggested Citation

  • Ivar Kolstad, 2004. "What constitutes a convention? Implications for the coexistence of conventions," CMI Working Papers WP 2004: 3, CMI (Chr. Michelsen Institute), Bergen, Norway.
    • Handle: RePEc:chm:wpaper:wp2004-3
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    File URL: https://www.cmi.no/publications/file/1799-what-constitutes-a-convention.pdf
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    References listed on IDEAS

    as
    1. Anderlini, Luca & Ianni, Antonella, 1996. "Path Dependence and Learning from Neighbors," Games and Economic Behavior, Elsevier, vol. 13(2), pages 141-177, April.
    2. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-1071, September.
    3. Sugden, Robert, 1995. "The coexistence of conventions," Journal of Economic Behavior & Organization, Elsevier, vol. 28(2), pages 241-256, October.
    4. H. Peyton Young, 1996. "The Economics of Convention," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 105-122, Spring.
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    Cited by:

    1. Francesco Feri & Miguel Meléndez-Jiménez, 2013. "Coordination in evolving networks with endogenous decay," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 955-1000, November.
    2. Odd-Helge Fjeldstad & Florida Henjewele & Geoffrey Mwambe & Erasto Ngalewa & Knut Nygaard, 2004. "Local government finances and financial management in Tanzania," CMI Working Papers WP 2004: 7, CMI (Chr. Michelsen Institute), Bergen, Norway.
    3. Espen Villanger, 2004. "Powerful donors and foreign policy: The role of multilateral financial institutions," CMI Working Papers WP 2004: 12, CMI (Chr. Michelsen Institute), Bergen, Norway.

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    More about this item

    Keywords

    Conventions Coordination game Equilibrium selection JEL classification: C73;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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