The Double Nature of Conventions - An Experimental Analysis

Discussion Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: This paper aims to integrate both economic and sociological notions of conventions in a single analytical framework. To this end, it starts by distinguishing conceptually between behavioral convention, i.e. an arbitrary but stable social regularity, and normative convention, i.e. a principle of action prescribing how to behave in a certain class of situations. A game theoretical framework to represent the interrelation between both concepts is then introduced. Finally, this relation is studied experimentally. The main results of the experiment are: (1) normative conventions have to be commonly known and accepted among subjects in order to work as guides to coordinate on behavioral conventions; (2) once subjects follow a normative convention they are highly consistent with it in a repeated environment; (3) efficiency concerns are focal in the class of games studied in this paper.

Keywords: coordination; convention; consistency; efficiency; experiments (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-exp
Date: 2006-04

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