Emergent Conventions In Evolutionary Games
John Van Huyck
December 1997
Prepared for Handbook of Experimental Economics
Results
Editors: Charles R. Plott and Vernon L. Smith
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© 1997 by the authors. You may freely reproduce and distribute it electronically or in print, provided it is distributed in its entirely, including this copyright notice.
A convention is a regularity in behavior amongst members of a community in a recurrent situation that is customary, expected, and mutually consistent. This definition combines facts about an observable situation (customary behavioral regularities) and properties of an abstract game derived from the observable situation (mutually consistent behavior). An example of a mutual consistency condition for an abstract game is Nash equilibrium. A Nash equilibrium is an assignment to each player of a strategy that is optimal for him when the others use the strategies assigned to them. The mutual consistency condition is important because it insures that members of the community have a good reason to conform to the regularity in behavior.
This chapter reports experimental results on the emergence of conventions in evolutionary games. In an evolutionary game, a stage game is played repeatedly by random subsets of the cohort. Laboratory cohorts are usually chosen to be large enough to make repeated game strategies unrewarding, but small enough to allow a convention to emerge quickly.
A cohort is likely to bring customary and expected behavior into the laboratory that is not mutually consistent given the incentives of the experiment. Widely discussed examples are the salience of efficiency in games with inefficient dominant strategies and the salience of equal division in games with unequal bargaining power. The emergent convention approach to the origin of mutually consistent behavior suggests that such facts reflect the ambient convention into which the experiment is placed. Moreover, if the emergent convention approach is correct, one can design experiments in which inefficient or unequal division conventions emerge.
The chapter begins by reviewing the evolutionary stag hunt game literature in which inefficient conventions emerge systematically. It then focuses on two papers. Van Huyck, Battalio, and Rankin (1997) reported observing emergent conventions based on labels and populations in evolutionary pure coordination (collaboration) games. Van Huyck, et al. (1995) reported observing the emergence of unequal division conventions in cohorts of symmetrically endowed subjects.
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Hypertext links checked January 14, 1998
Raymond Battalio, Larry Samuelson, and John Van Huyck, "Risk Dominance, Payoff Dominance, and Probabilistic Choice Learning," laser-script, November 1997;
Ken Binmore, John Gale, and Larry Samuelson, "Learning to be Imperfect: The Ultimatum Game," Games and Economic Behavior 8, 1995, 56-90.
Kenneth Clark, Stephen Kay and Martin Sefton, "When are Nash Equilibria Self-Enforcing? An Experimental Analysis," laser-script, May 1996.
Russell Cooper, Douglas V. DeJong, Robert Forsythe, and Thomas W. Ross, "Communication in coordination games," Quarterly Journal of Economics, 107:739-773, 1992.
Daniel Friedman, "Equilibrium in evolutionary games: Some experimental results," Economic Journal, 106:1-25, 1996.
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Richard D. McKelvey and Thomas R. Palfrey, "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, 10(1) July 1995, 6-38;
Frederick Rankin, John Van Huyck, and Raymond Battalio, "Strategic Similarity And Emergent Conventions: Evidence from Scrambled Payoff Perturbed Stag Hunt Games", laser-script, July 1997;
Roth, A.E. and I. Erev "Learning in Extensive-Form Games: Experimental Data and Simple Dynamic Models in the Intermediate Term," Games and Economic Behavior, 8, January 1995, 164-212;
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Paul Straub, "Risk Dominance and Coordination Failure in Static Games," The Quarterly Review of Economics and Finance, 35(4) Winter 1995, 339-363.
J.B. Van Huyck, R.C. Battalio, S. Mathur, A. Ortmann and P.P. Van Huyck, "On the Origin of Convention: Evidence from symmetric bargaining games," International Journal of Game Theory 24(2) 1995, 187-212.
John B. Van Huyck, Raymond C. Battalio, and Frederick Rankin, "On the Origin of Convention: Evidence from Coordination Games," Economic Journal 107(442) May 1997, 576-597.
Peyton Young, "The evolution of conventions," Econometrica, 61: 57-84, 1993.
Peyton Young, Individual Strategy and Social Structure: An evolutionary theory of institutions, laser-script, 1997.
Jorgen W. Weibull, Evolutionary Game Theory, (Cambridge, MA: The MIT Press, 1995).
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