Language, meaning and games: a model of communication, coordination and evolution

Language is arguably a powerful coordination device in real-life interactions. We here develop a game-theoretic model of two-sided pre-play communication that generalizes the cheap-talk approach by way of introducing a meaning correspondence between messages and actions, and postulating two axioms met by natural languages. Deviations from this correspondence are called dishonest and players have a lexicographic preference for honesty, second to material payoffs. The model is first applied to finite and symmetric two-player games and we establish that, in generic and symmetric n x n -coordination games, a Nash equilibrium component in such a lexicographic communication game is evolutionarily stable if and only if it results in the unique Pareto efficient outcome of the underlying game. We discus Aumann’s (1990) example of a Pareto efficient equilibrium that is not self-enforcing. We also extend the approach to one-sided communication.Communication, coordination, language, honesty, evolutionary stability.

Language, meaning and games A model of communication, coordination and evolution

Language is arguably a powerful coordination device in real-life interactions. We here develop a game-theoretic model of pre-play communication that generalizes the cheap-talk approach by way of introducing a meaning correspondence between messages and actions, and postulating two axioms met by natural languages. Deviations from this correspondence are called dishonest and players have a lexicographic preference for honesty, second to material payoffs. The model is first applied to two-sided preplay communication in finite and symmetric two-player games and we establish that, in generic and symmetric n × n - coordination games, a Nash equilibrium component in such a lexicographic communication game is evolutionarily stable if and only if it results in the unique Pareto efficient outcome of the underlying game. We extend the approach to one-sided communication in finite, not necessarily symmetric, two-player games.

In Defense of DEFECT or Cooperation does not Justify the Solution Concept

The one-state machine that always defects is the only evolutionarily stable strategy in the machine game that is derived from the prisoners' dilemma, when preferences are lexicographic in the complexity. This machine is the only stochastically stable strategy of the machine game when players are restricted to choosing machines with a uniformly bounded complexity.Cooperation; prisoners' dilemma; automata; evolution.

The Approach of Ecological Economics

This paper discusses the major tenets of ecological economics - including value pluralism, methodological pluralism, and multi-criteria policy assessment. Ecological economics offers viable alternatives to the theoretical foundations and policy recommendations of neoclassical welfare economics. A revolution in neoclassical economics is currently taking place and the core assumptions of welfare economics are being replaced with more realistic models of consumer and firm behavior. But we argue that these new theoretical and empirical findings are largely ignored in applied work and policy applications in environmental economics. As the only heterodox school of economics focusing on the human economy both as a social system and as one imbedded in the biophysical universe, and thus both holistic and scientifically based, ecological economics is poised to play a leading role in recasting the scope and method of economic science.

An Evolutionary Analysis of Pre-Play Communication and Efficiency in Games

This paper studies the effects of pre-play communication on equilibrium selection in 2x2 symmetric coordination games. The players repeatedly play a coordination game preceded by an opportunity to exchange payoff irrelevant messages and gradually adjust their behavior. In short run, the players' access to the actions of the coordination game may be restricted. While the players can revise the set of accessible actions only occasionally, they frequently adjust their behavior in the cheap-talk game, taking the set of currently available actions as given. We obtain an efficient-equilibrium-selection result if the under-lying coordination game satisfies the self-signalling condition. On the other hand, if the game is not self-signalling, both the efficient and the inefficient equilibrium outcomes are stable.Coordination games; Communication; Evolution; Efficiency; Cheap talk

Weber's Law and the Biological Evolution of Risk Preferences: The Selective Dominance of the Logarithmic Utility Function

The paper offers a proof that expected utility maximisation with logarithmic utility is a dominant preference in the biological selection process in the sense that a population following any other preference for decision-making under risk will, with a probability that approaches certainty, disappear relative to the population following this preference as time goes to infinity. The result is contrasted with Weber's and Fechner's Psychophysical Law which implies logarithmic sensation functions for objective physical stimuli.evolution, selection, risk preferences