Establishment of conventions: Application of theory of games

Abstract

The paper deals with application of theory of games in explanation of convention establishment. Conventions are outcome ("equilibrium") of repeated game. Convention consists of the strategies which had established as the most successful passing the time und which had spontaneously emerged as the patterns of rational behavior - evolutionarily stable strategies.

Keywords

• repeated game
• evaluative game
• convention
• bounded rationality
• strategy
• Nash equilibrium