Multi-level evolution in population games

In this paper, we analyze a generalization of the evolutionary model of Kandori, Mailath, & Rob where the population is partitioned into groups and evolution takes place ‘in parallel’ at the following two levels: (i) within groups, at the lower level; (ii) among groups, at the higher one. Unlike in their context, efficiency considerations always overcome those of risk-dominance in the process of selecting the long-run equilibrium. This provides an explicitly dynamic basis for a conclusion reminiscent of those put forward in the biological literature by the so-called theories group selection. From a normative viewpoint, it suggests the potential importance of ‘decentralization’, here understood as local and independent interaction.