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Rapid evolution under inertia

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  • Norman, Thomas W.L.

Abstract

This paper demonstrates that inertia driven by switching costs leads to more rapid evolution in a class of games that includes mxm pure coordination games. Under the best-response dynamic and a fixed rate of mutation, the expected waiting time to reach long-run equilibrium is of lower order in the presence of switching costs, due to the creation of new absorbing states that allow Ellison's [Ellison, G., 2000. Basins of attraction, long-run stochastic stability, and the speed of step-by-step evolution. Rev. Econ. Stud. 67, 17-45] "step-by-step" evolution to occur.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 66 (2009)
Issue (Month): 2 (July)
Pages: 865-879

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Handle: RePEc:eee:gamebe:v:66:y:2009:i:2:p:865-879

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Web page: http://www.elsevier.com/locate/inca/622836

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Keywords: Evolution Mutations Long-run equilibrium Waiting times Inertia Switching costs;

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References

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  1. Robson, Arthur J. & Vega-Redondo, Fernando, 1996. "Efficient Equilibrium Selection in Evolutionary Games with Random Matching," Journal of Economic Theory, Elsevier, Elsevier, vol. 70(1), pages 65-92, July.
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  3. Brock,W.A. & Durlauf,S.N., 2000. "Discrete choice with social interactions," Working papers, Wisconsin Madison - Social Systems 7, Wisconsin Madison - Social Systems.
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  5. van Damme, Eric & Weibull, Jorgen W., 2002. "Evolution in Games with Endogenous Mistake Probabilities," Journal of Economic Theory, Elsevier, Elsevier, vol. 106(2), pages 296-315, October.
  6. Myatt, David P. & Wallace, Chris C., 2004. "Adaptive play by idiosyncratic agents," Games and Economic Behavior, Elsevier, Elsevier, vol. 48(1), pages 124-138, July.
  7. Sethi, Rajiv, 1998. "Strategy-Specific Barriers to Learning and Nonmonotonic Selection Dynamics," Games and Economic Behavior, Elsevier, Elsevier, vol. 23(2), pages 284-304, May.
  8. Ellison, Glenn, 2000. "Basins of Attraction, Long-Run Stochastic Stability, and the Speed of Step-by-Step Evolution," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 67(1), pages 17-45, January.
  9. Tilman B�rgers & Rajiv Sarin, . "Learning Through Reinforcement and Replicator Dynamics," ELSE working papers 051, ESRC Centre on Economics Learning and Social Evolution.
  10. Binmore, Ken & Larry Samuelson, 1994. "Muddling Through: Noisy Equilibrium Selection," Discussion Paper Serie B 275, University of Bonn, Germany.
  11. Samuelson Larry, 1994. "Stochastic Stability in Games with Alternative Best Replies," Journal of Economic Theory, Elsevier, Elsevier, vol. 64(1), pages 35-65, October.
  12. Ellison, Glenn, 1997. "Learning from Personal Experience: One Rational Guy and the Justification of Myopia," Games and Economic Behavior, Elsevier, Elsevier, vol. 19(2), pages 180-210, May.
  13. Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers, Princeton, Woodrow Wilson School - John M. Olin Program 71, Princeton, Woodrow Wilson School - John M. Olin Program.
  14. Blume, Lawrence E., 2003. "How noise matters," Games and Economic Behavior, Elsevier, Elsevier, vol. 44(2), pages 251-271, August.
  15. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
  16. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, Econometric Society, vol. 61(5), pages 1047-71, September.
  17. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, Econometric Society, vol. 61(1), pages 57-84, January.
  18. Klemperer, Paul, 1995. "Competition When Consumers Have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 62(4), pages 515-39, October.
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Cited by:
  1. Thomas Norman, 2010. "Cycles versus equilibrium in evolutionary games," Theory and Decision, Springer, Springer, vol. 69(2), pages 167-182, August.
  2. Ge Jiang & Simon Weidenholzer, 2014. "Local Interactions and Switching Costs," Economics Discussion Papers, University of Essex, Department of Economics 746, University of Essex, Department of Economics.

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