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Selecting Equilibria using Best-Response Dynamics

Author

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  • Vincent Boucher

    (Universite Laval)

Abstract

I propose a simple simulation procedure for large games with multiple equilibria. The simulation procedure is based on a best-response dynamic. The implied equilibrium selection mechanism is intuitive: more stable equilibria are selected with higher probability.

Suggested Citation

  • Vincent Boucher, 2017. "Selecting Equilibria using Best-Response Dynamics," Economics Bulletin, AccessEcon, vol. 37(4), pages 2728-2734.
    • Handle: RePEc:ebl:ecbull:eb-17-00487
    as

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    References listed on IDEAS

    as
    1. Ui, Takashi, 2001. "Robust Equilibria of Potential Games," Econometrica, Econometric Society, vol. 69(5), pages 1373-1380, September.
    2. Glenn Ellison, 2000. "Basins of Attraction, Long-Run Stochastic Stability, and the Speed of Step-by-Step Evolution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(1), pages 17-45.
    3. , & , P., 2014. "Refinements of Nash equilibrium in potential games," Theoretical Economics, Econometric Society, vol. 9(3), September.
    4. Jovanovic, Boyan, 1989. "Observable Implications of Models with Multiple Equilibria," Econometrica, Econometric Society, vol. 57(6), pages 1431-1437, November.
    5. Yann Bramoullé & Andrea Galeotti & Brian Rogers, 2016. "The Oxford Handbook of the Economics of Networks," Post-Print hal-01447842, HAL.
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    7. Alfred Galichon & Marc Henry, 2011. "Set Identification in Models with Multiple Equilibria," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(4), pages 1264-1298.
    8. Yann Bramoullé & Andrea Galeotti & Brian Rogers, 2016. "The Oxford Handbook of the Economics of Networks," Post-Print hal-03572533, HAL.
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    10. Govindan, Srihari & Wilson, Robert B., 2005. "Refinements of Nash Equilibrium," Research Papers 1897, Stanford University, Graduate School of Business.
    11. Kim, Youngse, 1996. "Equilibrium Selection inn-Person Coordination Games," Games and Economic Behavior, Elsevier, vol. 15(2), pages 203-227, August.
    12. repec:hal:wpspec:info:hdl:2441/5rkqqmvrn4tl22s9mc4ao8ocg is not listed on IDEAS
    13. Elie Tamer, 2003. "Incomplete Simultaneous Discrete Response Model with Multiple Equilibria," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(1), pages 147-165.
    14. Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
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    Citations

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    Cited by:

    1. Pangallo, Marco & Heinrich, Torsten & Jang, Yoojin & Scott, Alex & Tarbush, Bassel & Wiese, Samuel & Mungo, Luca, 2021. "Best-Response Dynamics, Playing Sequences, And Convergence To Equilibrium In Random Games," INET Oxford Working Papers 2021-23, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    2. Torsten Heinrich & Yoojin Jang & Luca Mungo & Marco Pangallo & Alex Scott & Bassel Tarbush & Samuel Wiese, 2023. "Best-response dynamics, playing sequences, and convergence to equilibrium in random games," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(3), pages 703-735, September.
    3. Pangallo, Marco & Heinrich, Torsten & Jang, Yoojin & Scott, Alex & Tarbush, Bassel & Wiese, Samuel & Mungo, Luca, 2021. "Best-Response Dynamics, Playing Sequences, And Convergence To Equilibrium In Random Games," INET Oxford Working Papers 2021-02, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    4. Boucher, Vincent, 2020. "Equilibrium homophily in networks," European Economic Review, Elsevier, vol. 123(C).
    5. Vincent Boucher, 2017. "The Estimation of Network Formation Games with Positive Spillovers," Cahiers de recherche 1710, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.

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    More about this item

    Keywords

    Potential Games; Equilibrium Selection Mechanism; Basin of Attraction;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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