Convention as correlated equilibrium

Erkenntnis 42 (1):65 - 87 (1995)
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Abstract

Aconvention is a state in which agents coordinate their activity, not as the result of an explicit agreement, but because their expectations are aligned so that each individual believes that all will act so as to achieve coordination for mutual benefit. Since agents are said to follow a convention if they coordinate without explicit agreement, the notion raises fundamental questions: (1) Why do certain conventions remain stable over time?, and (2) How does a convention emerge in the first place? In a pioneering study, Lewis (1969) addresses these questions by applyingnoncooperative game theory. Lewis defines a convention as aNash coordination equilibrium of a noncooperative game that issalient, that is, it is somehow conspicuous to the agents so that all expect one another to conform with the equilibrium. This paper presents a new game theoretic definition of conventions, which formalizes the notion of salience and which also generalizes the class of conventions Lewis discusses in his work. I define a convention as acorrelated equilibrium (Aumann 1974, 1987) satisfying apublic intentions criterion: Every agent wants his intended action to becommon knowledge. I argue that many conventions correspond to correlated equilibria that are not Nash equilibria, and that this is consistent with Lewis' general viewpoint. Finally, I argue that game theoretic characterizations of convention, such as Lewis' and my own, help to explain a convention's stability, but that a fully satisfactory account of the emergence of convention requires a theory of equilibrium selection beyond the scope of Lewis' work.

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Peter Vanderschraaf
University of California, Merced

Citations of this work

A unified social ontology.Francesco Guala & Frank Hindriks - 2015 - Philosophical Quarterly 65 (259):177-201.
Norms and conventions.Nicholas Southwood & Lina Eriksson - 2011 - Philosophical Explorations 14 (2):195 - 217.
Knowledge, equilibrium and convention.P. Vanderschraaf - 1998 - Erkenntnis 49 (3):337-369.

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References found in this work

Convention: A Philosophical Study.David Kellogg Lewis - 1969 - Cambridge, MA, USA: Wiley-Blackwell.
Theory of Games and Economic Behavior.John Von Neumann & Oskar Morgenstern - 1944 - Princeton, NJ, USA: Princeton University Press.
The Dynamics of Rational Deliberation.Brian Skyrms - 1990 - Harvard University Press.
Truth by Convention.W. V. Quine - 1936 - In Philosophical Essays for Alfred North Whitehead. London: Longmans, Green & Co.. pp. 90–124.

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