Competition among Conventions
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).
|Date of creation:||02 Dec 1993|
|Date of revision:||04 Dec 1993|
|Note:||Word for Windows 2.0 file, 21 pages, uuencoded after 'get'-ing it by email, 'uudecode' it. A Post Script file is available from the author.|
|Contact details of provider:|| Web page: http://22.214.171.124|
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.:
- Robson, A.J., 1989. "Efficiency In Evolutionary Games: Darwin, Nash And Secret Handshake," Papers 89-22, Michigan - Center for Research on Economic & Social Theory.
- Kandori, M. & Mailath, G.J., 1991.
"Learning, Mutation, And Long Run Equilibria In Games,"
71, Princeton, Woodrow Wilson School - John M. Olin Program.
- 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.
- M. Kandori & G. Mailath & R. Rob, 1999. "Learning, Mutation and Long Run Equilibria in Games," Levine's Working Paper Archive 500, David K. Levine.
- Sobel, Joel, 1993. "Evolutionary stability and efficiency," Economics Letters, Elsevier, vol. 42(2-3), pages 301-312.
- Ellison, Glenn, 1993.
"Learning, Local Interaction, and Coordination,"
Econometric Society, vol. 61(5), pages 1047-71, September.
- Matsui, Akihiko, 1991. "Cheap-talk and cooperation in a society," Journal of Economic Theory, Elsevier, vol. 54(2), pages 245-258, August.
- Van Huyck, John B. & Gillette, Ann B. & Battalio, Raymond C., 1992. "Credible assignments in coordination games," Games and Economic Behavior, Elsevier, vol. 4(4), pages 606-626, October.
- Noeldecke,Georg & Samuelson,Larry, .
"An evolutionary analysis of backward and forward induction,"
Discussion Paper Serie B
228, University of Bonn, Germany.
- Noldeke Georg & Samuelson Larry, 1993. "An Evolutionary Analysis of Backward and Forward Induction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 425-454, July.
- G. Noldeke & L. Samuelson, 2010. "An Evolutionary Analysis of Backward and Forward Induction," Levine's Working Paper Archive 538, David K. Levine.
- Aumann, Robert J. & Sorin, Sylvain, 1989. "Cooperation and bounded recall," Games and Economic Behavior, Elsevier, vol. 1(1), pages 5-39, March.
- Kandori Michihiro & Rob Rafael, 1995.
"Evolution of Equilibria in the Long Run: A General Theory and Applications,"
Journal of Economic Theory,
Elsevier, vol. 65(2), pages 383-414, April.
- M. Kandori & R. Rob, 2010. "Evolution of Equilibria in the Long Run: A General Theory and Applications," Levine's Working Paper Archive 502, David K. Levine.
- Samuelson, Larry, 1991. "Limit evolutionarily stable strategies in two-player, normal form games," Games and Economic Behavior, Elsevier, vol. 3(1), pages 110-128, February.
- Akihiko Matsui, 1989. "Cheap Talk and Cooperation in the Society," Discussion Papers 848, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- 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.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- 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, June.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpga:9312001. 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: (EconWPA)
If references are entirely missing, you can add them using this form.