The evolution of conventions under incomplete information

We formulate an evolutionary learning process with trembles for static games of incomplete information. For many games, if the amount of trembling is small, play will be in accordance with the games’ (strict) Bayesian equilibria most of the time. This supports the notion of Bayesian equilibrium. Often the process will select a specific equilibrium. We study an extension to incomplete information of the prototype conflict known as “Chicken” and find that the equilibrium selection by evolutionary learning may well be in favor of inefficient Bayesian equilibria where some types of players fail to coordinate. Copyright Springer-Verlag Berlin/Heidelberg 2005