Evolving Strategic Behaviors through Competitive Interaction in the Large

The purpose of this paper is to provide a new approach for investigating the competitive interactions in the large. Another purpose of this paper is to study emergent strategic behaviors and to analyze the effects of bounded rationality and the mimicry strategy in the competitive situations. We show how the society gropes for its way towards equilibrium in an imperfect world where agents are sensible but not perfectly rational. They have limited information, and there is no common knowledge among them. This paper is also about social learning and shows how the society as a whole learns even when the individuals composing it do not. Specifically, it is about the evolution of social norms. We especially examine how conventions evolve in a society that begins in an amorphous state where there is no established custom, and individuals rely on hearsay to determine what to do. With simulations, we provide specific conditions as to which conventions are most likely to emerge. Keyword: bounded rationality, local interaction, strategic interaction, mimicry, social convention