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To err is human: Implementation in quantal response equilibria

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  • Tumennasan, Norovsambuu

Abstract

We study the implementation problem when players are prone to make mistakes. To capture the idea of mistakes, Logit Quantal Response Equilibrium (LQRE) is used, and we consider a case in which players are almost rational, i.e., the sophistication level of players approaches infinity. We show that quasimonotonicity, a small variation of Maskin monotonicity, and no worst alternative are the necessary conditions for restricted Limit LQRE (LLQRE) implementation. Moreover, these conditions are sufficient for both restricted and unrestricted LLQRE implementations if there are at least three players and if at least one player has a state-independent worst alternative.

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Bibliographic Info

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

Volume (Year): 77 (2013)
Issue (Month): 1 ()
Pages: 138-152

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Handle: RePEc:eee:gamebe:v:77:y:2013:i:1:p:138-152

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

Related research

Keywords: Implementation; Mechanisms; Bounded rationality; Quantal response equilibria;

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References

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  1. Jacob K Goeree & Charles A Holt, 2004. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," Levine's Working Paper Archive 618897000000000900, David K. Levine.
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  8. Tumennasan, Norovsambuu, 2013. "To err is human: Implementation in quantal response equilibria," Games and Economic Behavior, Elsevier, vol. 77(1), pages 138-152.
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  15. Eliaz, Kfir, 2002. "Fault Tolerant Implementation," Review of Economic Studies, Wiley Blackwell, vol. 69(3), pages 589-610, July.
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Citations

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Cited by:
  1. Tumennasan, Norovsambuu, 2013. "To err is human: Implementation in quantal response equilibria," Games and Economic Behavior, Elsevier, vol. 77(1), pages 138-152.
  2. Renou, Ludovic & Schlag, Karl H., 2011. "Implementation in minimax regret equilibrium," Games and Economic Behavior, Elsevier, vol. 71(2), pages 527-533, March.

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