Evolution of social norms and correlated equilibria.

Social norms regulate and coordinate most aspects of human social life, yet they emerge and change as a result of individual behaviors, beliefs, and expectations. A satisfactory account for the evolutionary dynamics of social norms, therefore, has to link individual beliefs and expectations to population-level dynamics, where individual norms change according to their consequences for individuals. Here, we present a model of evolutionary dynamics of social norms that encompasses this objective and addresses the emergence of social norms. In this model, a norm is a set of behavioral prescriptions and a set of environmental descriptions that describe the expected behaviors of those with whom the norm holder will interact. These prescriptions and descriptions are functions of exogenous environmental events. These events have no intrinsic meaning or effect on the payoffs to individuals, yet beliefs/superstitions regarding them can effectuate coordination. Although a norm's prescriptions and descriptions are dependent on one another, we show how they emerge from random accumulations of beliefs. We categorize the space of social norms into several natural classes and study the evolutionary competition between these classes of norms. We apply our model to the Game of Chicken and the Nash Bargaining Game. Furthermore, we show how the space of norms and evolutionary stability are dependent on the correlation structure of the environment and under which such correlation structures social dilemmas can be ameliorated or exacerbated.