Pure backward induction reasoning in dynamic games

Fernando Vega

(Chinese University of Hong Kong)

«Networks and Norms (joint with Matteo Marsili, Intentional Center of Theoretical Physics, Trieste)»

ABSTRACT: The co-evolution of social networks and social norms gives rise to a wide range of dynamic behavior. For, as our model highlights, networks not only support the rise of new norms but also tend to block significant changes in established ones. This is why history often shows that, before prevailing norms can be dislodged, incumbent networks must erode. Over time, therefore, the evolution of norms tends to display long phases of slow change, sporadically punctuated by short periods of fast network adjustment in which new norms arise and then gain a robust foothold. Our theoretical framework, by accommodating different time scales, sheds light of how such a rise and fall of norms and networks unfold.

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