Conventions Under Heterogeneous Choice Rules
40 Pages Posted: 30 May 2019 Last revised: 20 Aug 2019
Date Written: May 5, 2019
Strategies of players in a population are updated according to the choice rules of agents, where each agent is a player or a coalition of players. It is known that classic results on the stochastic stability of conventions are due to an asymmetry property of the strategy updating process. We show that asymmetry can be defined at the level of the choice rule and that asymmetric rules can be mixed and matched whilst retaining asymmetry of the aggregate process. Specifically, we show robustness of asymmetry to heterogeneity within an agent (Alice follows different rules at different times); heterogeneity between agents (Alice and Bob follow different rules); and heterogeneity in the timing of strategy updating. These results greatly expand and convexify the domain of choice rules for which results on the stochastic stability of conventions are known.
Keywords: evolution, conventions, heterogeneity, representative agent
JEL Classification: C73
Suggested Citation: Suggested Citation