"Peyton Young's study puts the evolution of institutions on the basis of individual choices in an adaptive and adapting environment. It puts a firm foundation under the vague idea of 'spontaneous order.' The exposition is extraordinarily clear; Young introduces and explains the mathematical tools he uses in his brilliant synthesis and development, which combines ideas from evolutionary theory and the study of learning. The book is accessible to the beginner in the field and yet no one, no matter how expert, will fail to learn something."--Kenneth J. Arrow, Stanford University, 1972 Nobel Laureate in Economics<P>""Individual Strategy and Social Structure" makes a convincing case for an adaptive, low-rationality, probabilistic approach to game theory and to economics and social science in general."--Alvin E. Roth, Harvard University<P>"In this well written and elegant volume, Peyton Young takes a large step in redirecting the theory and the problems that game theorists deal with. Rather than asking what is the proper equilibrium notion for a game played by fully rational agents capable of making all necessary calculations, he asks what types of conventions of behavior or social institutions will intelligent but not omniscient agents create for themselves when they repeatedly face the same problem that needs to be solved. Clearly this is what the real world looks like and Young brings us closer to it."--Andrew Schotter, New York University

Peyton Young's study puts the evolution of institutions on the basis of individual choices in an adaptive and adapting environment. It puts a firm foundation under the vague idea of 'spontaneous order.' The exposition is extraordinarily clear; Young introduces and explains the mathematical tools he uses in his brilliant synthesis and development, which combines ideas from evolutionary theory and the study of learning. The book is accessible to the beginner in the field and yet no one, no matter how expert, will fail to learn something.

In this well written and elegant volume, Peyton Young takes a large step in redirecting the theory and the problems that game theorists deal with. Rather than asking what is the proper equilibrium notion for a game played by fully rational agents capable of making all necessary calculations, he asks what types of conventions of behavior or social institutions will intelligent but not omniscient agents create for themselves when they repeatedly face the same problem that needs to be solved. Clearly this is what the real world looks like and Young brings us closer to it.

makes a convincing case for an adaptive, low-rationality, probabilistic approach to game theory and to economics and social science in general.

[] should be a valuable resource for all interested in this extremely valuable and flexible technique. Self-contained and pleasant to read.

Neoclassical economics as-sumes that people are highly rational and can reason their way through even the most complex economic problems. In Individual Strategy and Social Structure, Peyton Young argues for a more realistic view in which people have a limited understanding of their environment, are sometimes short-sighted, and occasionally act in perverse ways. He shows how the cumulative experiences of many such individuals coalesce over time into customs, norms, and institutions that govern economic and social life. He develops a theory that predicts how such institutions evolve and characterizes their welfare properties.

The ideas are illustrated through a variety of examples, including patterns of residential segregation, rules of the road, claims on property, forms of economic contracts, and norms of equity. The book relies on new results in evolutionary game theory and stochastic dynamical systems theory, many of them originated by the author. It can serve as an introductory text, or be read on its own as a contribution to the study of economic and social institutions.

	Preface
	Acknowledgments
Ch. 1	Overview	3
Ch. 2	Learning	25
Ch. 3	Dynamic and Stochastic Stability	44
Ch. 4	Adaptive Learning in Small Games	66
Ch. 5	Variations on the Learning Process	77
Ch. 6	Local Interaction	91
Ch. 7	Equilibrium and Disequilibrium Selection in General Games	103
Ch. 8	Bargaining	113
Ch. 9	Contracts	131
Ch. 10	Conclusion	144
Appendix	Proofs of Selected Theorems	151
	Notes	173
	Bibliography	177
	Index	185