We examine a monopoly facing an uncertain demand and maximizing profits over a two-period horizon. Conditions are developed under which the firm will find it optimal to "experiment," or adjust initial prices or quantities away from their myopically optimal level in order to increase the...

We examine an evolutionary model in which the primary source of "noise" that moves the model between equilibria is not random, arbitrarily improbable mutations but mistakes in learning. We find conditions under which the payoff-dominant equilibrium in a 2x2 game is selected by the model as well...

Many complex organizations, such as planned Soviet enterprises and the U.S. military, routinely transfer employees between jobs. Since this sacrifices job-specific human capital, the practice is puzzling. This article shows that regular job transfers may be part of an optimal incentive scheme in...

Research in noncooperative game theory has focused attention on two questions: Should we expect equilibrium play? If so, which of the multiple equilibria that arise in many games should we expect? This paper summarizes recent approaches to these questions that have been based on evolutionary models.

We formulate a dynamic learning-and-adjustment model of a market in which sellers choose signals that potentitally reveal their types. If the dynamic process selects a unique limiting outcome, then that outcome must be an undefeated equilibrium; though to be undefeated does not suffice to be the...

We examine an evolutionary model in which the primary source of "noise" that moves the model between equilibria is not random, arbitrarily improbable mutations but mistakes in learning. We find conditions under which the payoff-dominant equilibrium in a 2 x 2 game is selected by the model as...