Evolution and the Interaction of Conventions

13 Pages Posted: 12 May 2003

See all articles by Akihiko Matsui

Akihiko Matsui

University of Tokyo - Faculty of Economics

Masahiro Okuno-Fujiwara

University of Tokyo - Faculty of Economics

Abstract

We develop a two-society model to analyse the interaction of societies with different conventions. After characterizing various equilibria, we apply an evolutionary approach to this world to see what happens if the two societies are integrated over time. For example, if the two societies are of similar size, the integration results in an "eclectic" convention, which leads to Pareto improvement. On the other hand, if one society is significantly smaller than the other, the smaller society whose convention disappears is worse off provided that its original convention is superior to that of the larger society.

JEL Classification: C70, F02, Z10

Suggested Citation

Matsui, Akihiko and Okuno-Fujiwara, Masahiro, Evolution and the Interaction of Conventions. Japanese Economic Review, Vol. 53, pp. 141-153, 2002. Available at SSRN: https://ssrn.com/abstract=324702

Akihiko Matsui (Contact Author)

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

Masahiro Okuno-Fujiwara

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

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