Chen, Hsiao-Chi; Chow, Yunshyong; Wu, Li-Chau - In: Economics Bulletin 32 (2012) 1, pp. 675-684
We revisit the model of Alos-Ferrer and Weidenholzer (2006) but under the assumption that risk-dominant equilibria are Pareto efficient. It is found that risk-dominant equilibria, non-risk-dominant equilibria, and some non-monomorphic states can emerge in the long run when players interact with...