Journal of Evolutionary Economics

, Volume 2, Issue 3, pp 165–177 | Cite as

How do conventions evolve?

  • Robert Boyer
  • André Orléan


The paper argues that, even in the absence of bureaucratic inertia, the transition from one convention to a superior one can be blocked. Because of the self-reinforcing mechanism generated by coordination effects, the economy can be locked-in to an Pareto-inferior convention. In the framework of evolutionary game theory, convention appears to be an evolutionary stable strategy. We show that the endogenous diffusion of a superior convention is possible but requires the presence of some social or cultural differentiation in order that coordination effects can be localized. The social or cultural links provide no information about the structure of the game, but help people to coordinate themselves by providing external points of reference. We construct a model where matching between agents respects a certain localization of interactions related to social or cultural similarity. These results are used to enlighten the surprising success of japanese labor management in US and UK transplants.

Key words

Institution Convention Evolutionary stable strategy Institutional change Diffusion process 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Adler P (1989) New Technologies and the American Industry. Mimeo, August, Stanford UniversityGoogle Scholar
  2. Adler P (1991) The “Learning Bureaucracy”: New United Motor Manufacturing, Inc. Mimeo School of Business Administration, University of Southern California, Draft 2.2, OctoberGoogle Scholar
  3. Akerlof GA (1980) A Theory of Social Custom, of Which Unemployment May Be One Consequence. Quarterly Journal of Economics 94: 749–775CrossRefGoogle Scholar
  4. Arrow K (1974) The limits of Organization. W. W. Norton & CompanyGoogle Scholar
  5. Arthur WB (1988) Competing Technologies: An Overview. In: Dosi R et al. (eds) Technical Change and Economic Theory, pp 590–607. Pinter PublishersGoogle Scholar
  6. Aumann RJ (1988) Preliminary Notes on Irrationality in Game Theory. Mimeo Stanford UniversityGoogle Scholar
  7. Boyer R, Orléan A (1991), Les transformations des conventions salariales entre théorie et histoire. D'Henry Ford au fordisme. Revue Economique 42: 233–272CrossRefGoogle Scholar
  8. Crawford VP, Haller H (1990) Learning how to Cooperate: Optimal play in a Repeated Coordination Games. Econometrica 58: 571–595CrossRefGoogle Scholar
  9. David P (1985) Clio and the Economics of QWERTY. American Economic Review 75: 332–337Google Scholar
  10. Economist Intelligence Unit (1991) Inside Nissan's Sunderland Plant. European Business (August): 79–97.Google Scholar
  11. Fallows J (1989) More Like Us. Houghton Mifflin Company, Boston.Google Scholar
  12. Fucini JJ, Fucini S (1990) Working for the Japanese. The Free Press, Macmillan, New YorkGoogle Scholar
  13. Goyal S, Janssen M (1991) Can we Learn to Coordinate? Mimeo Erasmus University, RotterdamGoogle Scholar
  14. Granovetter M (1978) Threshold Models of Collective Behavior. American Journal of Sociology 83: 1420–1443CrossRefGoogle Scholar
  15. Jones SRG (1984) The Economics of Conformism. Basil Blackwell, New YorkGoogle Scholar
  16. Kahneman D, Knetsch J, Thaler J (1986) Fairness as a Constraint on Profit Seeking. American Economic Review 76: 728–741Google Scholar
  17. Koike K, Inoki T (1990) Skill formation in Japan and southeast Asia. University of Tokyo PressGoogle Scholar
  18. Leibenstein H (1982) The Prisoners' Dilemma and the Invisible Hand: An Analysis of Intrafirm Productivity. American Economic Review 72: 92–97Google Scholar
  19. Lewis DK (1969) Convention: A Philosophical Study. Harvard University Press, CambridgeGoogle Scholar
  20. Maynard Smith J (1982) Evolution and the Theory of Games, Cambridge University Press, CambridgeGoogle Scholar
  21. Maynard Smith J, Price GR (1973) The Logic of Animal conflict. Nature 246: 15–18CrossRefGoogle Scholar
  22. Powell WW, DiMaggio PJ (1991) The new institutionalism in Organizational Analysis. Chicago University Press, ChicagoGoogle Scholar
  23. Reynaud B (1991) Les règles d'équité dans la formation des salaires: des études expérimentales aux formalisations économiques. Miméo, CEPREMAP, ParisGoogle Scholar
  24. Schelling T (1960) The Strategy of Conflict. Harvard University Press, CambridgeGoogle Scholar
  25. Schotter A (1981) The Economic Theory of Social Institutions. Cambridge University Press, CambridgeGoogle Scholar
  26. Sugden R (1986) The Economics of Rights, Co-operation and Welfare. Basil Blackwell, New YorkGoogle Scholar
  27. Summers LH (1988) Relative Wages, Efficiency Wages, and Keynesian Unemployment. American Economic Review 78: 383–388Google Scholar
  28. The Institute of Social Science (1990) Local Production of Japanese Automobile and Electronics Firms in the United States: The “Application” and “Adaptation” of Japanese Style Management”. Research Report no 23, March. University of TokyoGoogle Scholar
  29. Walliser B (1989) Théorie des jeux et genèse des institutions. Recherches Economiques de Louvain 55: 339–364Google Scholar
  30. White M, Trevor M (1983) Under Japanese Management: The Experience of British Workers. Heinemann, LondonGoogle Scholar

Copyright information

© Springer-Verlag 1992

Authors and Affiliations

  • Robert Boyer
    • 1
  • André Orléan
    • 2
  1. 1.CEPREMAPParisFrance
  2. 2.CREA (Ecole Polytechnique)ParisFrance

Personalised recommendations