Abstract
In this paper, we analyze a generalization of the evolutionary model of Kandori, Mailath, & Rob (1993) where the population is partitioned into groups and evolution takes place “in parallel” at the following two levels: (i) within groups, at the lower level; among groups, at the higher one. Unlike in their context, efficiency considerations always overcome those of risk-dominance in the process of selecting the long-run equilibrium. This provides an explicitly dynamic basis for a conclusion reminiscent of those put forward in the biological literature by the so-called theories group selection. From a normative viewpoint, it suggests the potential importance of “decentralization”, here understood as local and independent interaction.
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We acknowledge financial assistance by the Spanish Ministry of Education, CICYT project nos. PB 89-0294 and PS 90-0156. We also want to thank James Friedman and two anonymous referees for their helpful comments. The usual disclaimer applies.
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Canals, J., Vega-Redondo, F. Multi-level evolution in population games. Int J Game Theory 27, 21–35 (1998). https://doi.org/10.1007/BF01243192
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DOI: https://doi.org/10.1007/BF01243192