Equilibrium Selection under Different Learning Modes in Supermodular Games
AbstractWe apply the dynamic stochastic framework proposed by recent evolutionaryliterature to the class of strict supermodular games when two simplebehavior rules coexist in the population, imitation and myopic optimization.We assume that myopic optimizers are able to see how well their payoff doesrelative to what they can get in the stage game and therefore experimentmore in low payoff states. A clear-cut equilibrium selection result isobtained: the payoff dominant equilibrium emerges as the unique long runequilibrium. Furthermore, the expected waiting time until the payoffdominant equilibrium is reached is relatively short, even in the limit asthe population size grows large.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-061/1.
Date of creation: 11 Aug 1999
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Evolution; Imitation; Myopic Optimization; Payoff Dominant Equilibrium;
Other versions of this item:
- Kaarboe, O.M. & Tieman, A.F., 1999. "Equilibrium Selection under Different Learning Modes in Supermodular Games," Norway; Department of Economics, University of Bergen 1299, Department of Economics, University of Bergen.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-09-21 (All new papers)
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