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Competing conventions

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  • Neary, Philip R.

Abstract

This paper introduces a new coordination problem for a large but finite population – The Language Game. The population is partitioned into two groups of identical agents. Each player shares a common two-action strategy set and interacts pairwise with everyone else. Both symmetric profiles are Pareto-efficient strict equilibria, but the groups rank them differently. The profile where successful coordination occurs only within-group, with each group adopting their most preferred equilibrium action, is also an equilibrium provided the smaller groupʼs preferences are sufficiently strong. In all dynamically stable long-run outcomes, players in the same group adopt the same action. Three properties, that do not matter for equilibrium selection in standard homogeneous agent models, do matter in the Language Game. These are: group size, strength of group preferences, and rates of group adaptiveness (“group dynamism”). A relative increase in group size and group dynamism is always weakly beneficial.

Suggested Citation

  • Neary, Philip R., 2012. "Competing conventions," Games and Economic Behavior, Elsevier, vol. 76(1), pages 301-328.
  • Handle: RePEc:eee:gamebe:v:76:y:2012:i:1:p:301-328
    DOI: 10.1016/j.geb.2012.06.003
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      • Goyal, S. & Hernández, P. & Muñnez-Cánovasz, G. & Moisan, F. & Muñoz-Herrera, M. & Sánchez, A., 2017. "Integration and Diversity," Cambridge Working Papers in Economics 1721, Faculty of Economics, University of Cambridge.
      • Sanjeev Goyal & Penelope Hernandez & Guillem Martinez-Canovas & Frederic Moisan & Manuel Munoz-Herrera & Angel Sanchez, 2019. "Integration and Diversity," Working Papers 20190025, New York University Abu Dhabi, Department of Social Science, revised Sep 2020.
      • Sanjeev Goyal & Penélope Hernández & Guillem Martínez-Cánovas & Frederic Moisan & Manuel Muñoz-Herrera & Angel Sánchez, 2021. "Integration and Diversity," Post-Print hal-03188210, HAL.
      • Sanjeev Goyal & Pénélope Hernández & Guillem Martínez-Cánovas & Frédéric Moisan & Manuel Muñoz-Herrera & Ángel Sánchez, 2021. "Integration and diversity," Post-Print halshs-03051962, HAL.
    3. Jiabin Wu, 2019. "Social connections and cultural heterogeneity," Journal of Evolutionary Economics, Springer, vol. 29(2), pages 779-798, April.
    4. Jonas Hedlund & Carlos Oyarzun, 2018. "Imitation in heterogeneous populations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 937-973, June.
    5. Sawa, Ryoji & Wu, Jiabin, 2023. "Statistical inference in evolutionary dynamics," Games and Economic Behavior, Elsevier, vol. 137(C), pages 294-316.
    6. Hwang, Sung-Ha & Lim, Wooyoung & Neary, Philip & Newton, Jonathan, 2018. "Conventional contracts, intentional behavior and logit choice: Equality without symmetry," Games and Economic Behavior, Elsevier, vol. 110(C), pages 273-294.
    7. Ennio Bilancini & Leonardo Boncinelli, 2015. "Social coordination with locally observable types," Department of Economics 0051, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    8. Claudia Cerrone & Francesco Feri & Philip R. Neary, 2019. "Ignorance is bliss: a game of regret," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2019_10, Max Planck Institute for Research on Collective Goods.
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    10. Ennio Bilancini & Leonardo Boncinelli, 2020. "The evolution of conventions under condition-dependent mistakes," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(2), pages 497-521, March.
    11. Benndorf, Volker & Martínez-Martínez, Ismael & Normann, Hans-Theo, 2021. "Games with coupled populations: An experiment in continuous time," Journal of Economic Theory, Elsevier, vol. 195(C).
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    13. Daniel Christopher Opolot, 2022. "On the relationship between p-dominance and stochastic stability in network games," International Journal of Game Theory, Springer;Game Theory Society, vol. 51(2), pages 307-351, June.
    14. He, Simin, 2019. "Minority advantage and disadvantage in competition and coordination," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 464-482.
    15. Bunce, John A & McElreath, Richard, 2022. "Ethnicity and cultural dynamics," SocArXiv jr7u5, Center for Open Science.
    16. Philip R Neary & Jonathan Newton, 2017. "Heterogeneity in preferences and behavior in threshold models," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 2(1), pages 141-159, December.
    17. Sawa, Ryoji & Wu, Jiabin, 2018. "Reference-dependent preferences, super-dominance and stochastic stability," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 96-104.
    18. Sawa, Ryoji & Wu, Jiabin, 2018. "Prospect dynamics and loss dominance," Games and Economic Behavior, Elsevier, vol. 112(C), pages 98-124.
    19. Naono, Miharu, 2022. "Cost heterogeneity and the persistence of bilingualism," Games and Economic Behavior, Elsevier, vol. 136(C), pages 325-339.
    20. Lim, Wooyoung & Neary, Philip R., 2016. "An experimental investigation of stochastic adjustment dynamics," Games and Economic Behavior, Elsevier, vol. 100(C), pages 208-219.

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    More about this item

    Keywords

    Competing conventions; Stochastic stability; Equilibrium selection;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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