Escape dynamics and equilibria selection by iterative cycle decomposition
This paper explores the medium-run behaviour of bounded rational players in repeatedly played games when they occasionally experiment or make mistakes. The formal analysis introduces a hierarchical structure of limit sets to characterize the most possible medium-run behaviour over gradually increased time intervals. The paper refines the notion of stochastic stability and offers a precise measure of the speed at which stochastically stable equilibria occur. Finally, the paper applies the results to a 3x3 symmetric game of Young (1993).
Year of publication: |
2010
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Authors: | Cui, Zhiwei ; Zhai, Jian |
Published in: |
Journal of Mathematical Economics. - Elsevier, ISSN 0304-4068. - Vol. 46.2010, 6, p. 1015-1029
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Publisher: |
Elsevier |
Keywords: | Adaptive learning dynamics in games Escape dynamics Iterative cycle decomposition Stochastic stability |
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