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Contagion and State Dependent Mutations

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Author Info
Adam Szeidl () (Department of Economics, University of California, Berkeley)
In Ho Lee () (School of Economics, Seoul National University)
Akos Valentinyi () (University of Southampton)

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Abstract

Early results of evolutionary game theory showed that the risk dominant equilibrium is uniquely selected in the long run under the best-response dynamics with mutation. Bergin and Lipman (1996) qualified this result by showing that for a given population size the evolutionary process can select any strict Nash equilibrium if the probability of choosing a nonbest response is state-dependent. This paper shows that the unique selection of the risk dominant equilibrium is robust with respect to state dependent mutation in local interaction games. More precisely, for a given mutation structure there exists a minimum population size beyond which the risk dominant equilibrium is uniquely selected. Our result is driven by contagion and cohesion among players, which exist only in local interaction settings and favor the risk dominant strategy. Our result strengthens the equilibrium selection result of evolutionary game theory.

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Publisher Info
Paper provided by Institute of Economics, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 0104.

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Length: 26 pages
Date of creation: 12 Mar 2001
Date of revision:
Handle: RePEc:has:discpr:0104

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Related research
Keywords: contagion; state dependent mutations; risk dominance; local interaction games;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information

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. Lee, In Ho & Valentinyi, Akos, 2000. "Noisy Contagion without Mutation," Review of Economic Studies, Blackwell Publishing, vol. 67(1), pages 47-56, January.
  2. Bergin, James & Lipman, Barton L, 1996. "Evolution with State-Dependent Mutations," Econometrica, Econometric Society, vol. 64(4), pages 943-56, July. [Downloadable!] (restricted)
    Other versions:
  3. Blume Lawrence E., 1995. "The Statistical Mechanics of Best-Response Strategy Revision," Games and Economic Behavior, Elsevier, vol. 11(2), pages 111-145, November. [Downloadable!] (restricted)
    Other versions:
  4. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January. [Downloadable!] (restricted)
    Other versions:
  5. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-71, September. [Downloadable!] (restricted)
  6. Blume Lawrence E., 1993. "The Statistical Mechanics of Strategic Interaction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 387-424, July. [Downloadable!] (restricted)
  7. Anderlini, Luca & Ianni, Antonella, 1996. "Path Dependence and Learning from Neighbors," Games and Economic Behavior, Elsevier, vol. 13(2), pages 141-177, April. [Downloadable!] (restricted)
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  8. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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. Thomas Norman, . "Step-by-Step Evolution with State-Dependent Mutations," Economics Papers 2003-W08, Economics Group, Nuffield College, University of Oxford. [Downloadable!]
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