Name
Abstract | ||
|---|---|---|
Equilibrium selection in coordination games has generated a large literature. Kandori, Mailath and Rob [Econometrica 61 (1993) 29] and Young [Econometrica 61 (1993) 57] studied dynamic models of aggregate behaviour where agents best-respond to observations of population play. Crucially, infrequent mistakes (“mutations”) allow agents to take actions contrary to current trends and prevent initial configurations from determining long-run play. An alternative approach is offered here: Trembles are added to payoffs so that with some probability it is optimal to act against the flow of play. The long-run distribution of population behaviour is characterised—modes correspond to stable Bayesian Nash equilibria. Allowing the variance of payoff trembles to vanish (a purification process) a single equilibrium is played almost always in the long run. Kandori, Mailath, and Rob, and Young, show that the number of contrary actions required to escape an equilibrium determines selection; here, the likelihood that such actions are taken is equally important. |
Year | DOI | Venue |
|---|---|---|
2004 | 10.1016/j.geb.2003.07.004 | Games and Economic Behavior |
Keywords | DocType | Volume |
C72,C73 | Journal | 48 |
Issue | ISSN | Citations |
1 | 0899-8256 | 2 |
PageRank | References | Authors |
0.48 | 1 | 2 |
Name | Order | Citations | PageRank |
|---|---|---|---|
| David P. Myatt | 1 | 12 | 2.33 |
| Chris Wallace | 2 | 17 | 5.37 |