We study the evolution of a social norm of “cooperation” in a dynamic environment.Each agent lives for two periods and interacts with agents from the previous and nextgenerations via a coordination game. Social norms emerge as patterns of behaviorthat are stable in part due to agents’ interpretations of private information aboutthe past, inﬂuenced by occasional commonly-observed past behaviors. For suﬃcientlybackward-looking societies, history completely drives equilibrium play, leading to asocial norm of high or low cooperation. In more forward-looking societies, there is apattern of “reversion” whereby play starting with high (low) cooperation reverts towardlower (higher) cooperation. The impact of history can be countered by occasional“prominent” agents, whose actions are visible by all future agents and who can leveragetheir greater visibility to inﬂuence expectations of future agents and overturn socialnorms of low cooperation.
Via Alessandro Cerboni