Evolutionary selection of correlation mechanisms for coordination games

One of the main problems with the notion of correlated equilibrium is the l ack of an explicit rationale for the correlation mechanism that is adopted. This paper investigates the conditions under which a specific correlation mechanism may be selected through a social learning process in a population of boundedly rational players that are randomly matched to play a coordina tion game. The selection process among correlation mechanisms is defined by replicator equations and the qualitative features of the dynamics are anal yzed for the general case with n correlation devices. It is found that the dynamics generically select one specific mechanism among the alternative on es, thus bringing about a social standard of choice, i.e. a conventional wa y of correlating players' actions in anonymous interactions. This result th en provides a strong evolutionary rationale for correlated equilibrium as a solution concept for coordination games.