Competition among Conventions

Jörg Oechssler

Game Theory and Information from University Library of Munich, Germany

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).

JEL-codes: C7 D8 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1993-12-02, Revised 1993-12-04
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.
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Competition Among Conventions (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:9312001

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