A behavioural foundation for models of evolutionary drift
AbstractBinmore and Samuelson (1999) have shown that perturbations (drift) are crucial to study the stability properties of Nash equilibria. We contribute to this literature by providing a behavioural foundation for models of evolutionary drift. In particular, this article introduces a microeconomic model of drift based on the similarity theory developed by Tversky (1977), Kahneman and Tversky (1979) and Rubinstein (1988),(1998). An innovation with respect to those works is that we deal with similarity relations that are derived from the perception that each agent has about how well he is playing the game. In addition, the similarity relations are adapted to a dynamic setting. We obtain different models of drift depending on how we model the agentÂ´s assessment of his behaviour in the game. The examples of the ultimatum game and the chain-store game are used to show the conditions for each model to stabilize elements in the component of Nash equilibria that are not subgame- perfect. It is also shown how some models approximate the laboratory data about those games while others match the data.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 63 (2007)
Issue (Month): 3 (July)
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Web page: http://www.elsevier.com/locate/jebo
Other versions of this item:
- Uriarte Ayo, José Ramón, 2005. "A Behavioral Foundation for Models of Evolutionary Drift," IKERLANAK 2005-19, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
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