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Evolution and Correlated Equilibrium

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Author Info
Lars Koch ()
Abstract

We show that a set of outcomes outside the convex hull of Nash equilibria can be asymptotically stable with respect to convex monotonic evolutionary dynamics. Boundedly rational agents receive signals and condition the choice of strategies on the signals. A set of conditional strategies is asymptotically stable only if it represents a strict (correlated-)equilibrium set. There are correlated equilibria that cannot be represented by an asymptotically stable signal contingent strategy. For generic games it is shown that if signals are endogenous but no player has an incentive to manipulate the signal generating process and if the signal contingent strategy is asymptotically stable, then and only then, the outcome must be a strict Nash equilibrium.

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Publisher Info
Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse14_2008.

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Length: 30
Date of creation: Jun 2008
Date of revision:
Handle: RePEc:bon:bonedp:bgse14_2008

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 9221
Web page: http://www.bgse.uni-bonn.de/index.php?id=494

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Related research
Keywords: Dynamic Stability; Noncooperative Games; Correlated Equilibrium; Evolution;

Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Viossat, Yannick, 2007. "The replicator dynamics does not lead to correlated equilibria," Games and Economic Behavior, Elsevier, vol. 59(2), pages 397-407, May. [Downloadable!] (restricted)
  2. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January. [Downloadable!] (restricted)
  3. R. J. Aumann & J. H. Dreze, 2005. "When All is Said and Done, How Should You Play and What Should You Expect?," Discussion Paper Series dp387, Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem. [Downloadable!]
    Other versions:
  4. Cripps, Martin, 1991. "Correlated equilibria and evolutionary stability," Journal of Economic Theory, Elsevier, vol. 55(2), pages 428-434, December. [Downloadable!] (restricted)
  5. Hofbauer, Josef & Weibull, Jorgen W., 1996. "Evolutionary Selection against Dominated Strategies," Journal of Economic Theory, Elsevier, vol. 71(2), pages 558-573, November. [Downloadable!] (restricted)
    Other versions:
  6. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March. [Downloadable!] (restricted)
  7. Karl H. Schlag & Dieter Balkenborg, 2001. "Evolutionarily stable sets," International Journal of Game Theory, Springer, vol. 29(4), pages 571-595. [Downloadable!] (restricted)
  8. Swinkels, Jeroen M., 1992. "Evolution and strategic stability: From maynard smith to kohlberg and mertens," Journal of Economic Theory, Elsevier, vol. 57(2), pages 333-342, August. [Downloadable!] (restricted)
  9. Dr. Peter Kenning & Hilke Plassmann, 2004. "NeuroEconomics," Experimental 0412005, EconWPA. [Downloadable!]
  10. Balkenborg, Dieter & Schlag, Karl H., 2007. "On the evolutionary selection of sets of Nash equilibria," Journal of Economic Theory, Elsevier, vol. 133(1), pages 295-315, March. [Downloadable!] (restricted)
  11. George J. Mailath & Larry Samuelson & Avner Shaked, . "Correlated Equilibria and Local Interactions," CARESS Working Papres 97-6, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences. [Downloadable!]
    Other versions:
  12. Samuelson, Larry & Zhang, Jianbo, 1992. "Evolutionary stability in asymmetric games," Journal of Economic Theory, Elsevier, vol. 57(2), pages 363-391, August. [Downloadable!] (restricted)
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