This paper introduces two ideas, emotional state dependent utility components (ESDUCs), and evolutionary perfect Bayesian equilibrium (EPBE). Using a simple extensive form game, we illustrate the efficiency-enhancing role of a powerful ESDUC, the vengeance motive. Incorporating behavioral noise...

In repeated games there is in general a large set of equilibria. We also know that in the repeated prisoners dilemma there is a profusion of neutrally stable strategies, but no strategy that is evolutionarily stable. This paper investigates whether and how neutrally stable strategies can be...

Static and dynamic games are important tools for the analysis of strategic interactions among economic agents and have found many applications in economics. In many games, equilibria can be described as solutions of polynomial equations. In this paper, we describe state-of-the-art techniques for...

In this paper the existence and stability of equilibriums in an evolutionary game theory model of the labour market is studied by using the Lyapunov method. The model displays multiple equilibriums and it is shown that the Nash equilibriums of the static game are evolutionary stable equilibrium...

Evolutionary Finance focuses on questions of "survival and extinction" of investment strategies (portfolio rules) in the market selection process. It analyzes stochastic dynamics of financial markets in which asset prices are determined endogenously by a short-run equilibrium between supply and...

For games in which there is no evolutionarily stable strategy, it can be useful to look for neutrally stable ones. In extensive form games for instance there is typically no evolutionary stable strategy, while there may very well be a neutrally stable one. Such strategies can however still be...

Human players in our laboratory experiment received flow payoffs over 120 seconds each period from a standard Hawk-Dove bimatrix game played in continuous time. Play converged closely to the symmetric mixed Nash equilibrium under a one-population matching protocol. When the same players were...

In the game of rock-paper-scissors with three players, this paper identifies conditions for a correlated equilibrium that differs from the mixed strategy Nash equilibrium and is evolutionarily stable. For this to occur, the correlation device attaches more probability to three-way ties and...

Economic agents are not always rational or farsighted and can make decisions according to simple behavioral rules that vary according to situation and can be studied using the tools of evolutionary game theory. Furthermore, such behavioral rules are themselves subject to evolutionary forces....

In Keynesian Beauty Contests notably modeled by p-guessing games, players try to guess the average of guesses multiplied by p. Theoretical and experimental research in the spirit of level k models has characterized the behavior of agents with different levels of reasoning when p is persistently...