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The Dynamic (In)Stability of Backwards Induction Author info | Abstract | Publisher info | Download info | Related research | Statistics R. Cressman, K.H. Schlag
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The analysis of the replicator dynamic in generic perfect information games yields the following results. In the long run, players play a Nash equilibrium provided that initially all strategies are present. There is at most one ``stable'' component (formally, an interior asymptotically stable set), play in this component will follow the backwards induction path. Existence of such a component is guaranteed in games with at most three consecutive decision nodes. An example of a ``longer'' game is provided where some trajectories starting close to the backwards induction component lead away and never come back.
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Paper provided by University of Bonn, Germany in its series Discussion Paper Serie B with number
347.
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Date of creation: Dec 1995Date of revision:
Handle: RePEc:bon:bonsfb:347Contact details of provider: 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=517
For technical questions regarding this item, or to correct its listing, contact: (Daniel Park).
Keywords: perfect information ; extensive-form game ; Centipede Game ; backwards induction ; replicator dynamics ; interior asymptotic stability. ; Other versions of this item:
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
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