4 - On the Evolution of Coordination and Inequality-Preserving Conventions – the Battle of the Sexes Revisited

Summary

Coordination is a central feature of economic life. If we do not coordinate our activities, we are destined to waste our time and effort. However, often the way we coordinate has distributional consequences – some people receive more benefits than others. Such situations establish what Ullman Margalit (1977) call “norms of partiality” where the convention created to solve a problem bestows privileges on one set of people. If you are on the short end of the convention, you may be upset. We investigate the creation and evolution of conventions of behavior in these situations using our “intergenerational games” framework or games in which a sequence of non-overlapping “generations” of players play a stage game for a finite number of periods and are then replaced by other agents, who continue the game in their role for an identical length of time. Players in generation t can offer advice to their successors in generation t + 1. What we find is that word-of-mouth social learning (in the form of advice from laboratory “parents” to laboratory “children”) can be a strong force in the creation of social conventions.