This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Fast Equilibrium Selection by Rational Players Living in a Changing World

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Frankel, David M.
Burdzy, Krzysztof
Pauzner, Ady

Additional information is available for the following registered author(s):

Abstract

We study a coordination game with randomly changing payoffs and small frictions in changing actions. Using only backwards induction, we find that players must coordinate on the risk-dominant equilibrium. More precisely, a continuum of fully rational players are randomly matched to play a symmetric 2 x 2 game. The payoff matrix changes according to a random walk. Players observe these payoffs and the population distribution of actions as they evolve. The game has frictions: opportunities to change strategies arrive from independent random processes, so that the players are locked into their actions for some time. As the frictions disappear, each player ignores what the others are doing and switches at her first opportunity to the risk-dominant action. History dependence emerges in some cases when frictions remain positive.

Download Info
To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 11923.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 05 May 2004
Date of revision:
Publication status: Published in Econometrica, 2001, No. 68, pp. 163-190.
Handle: RePEc:isu:genres:11923

Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Email:
Web page: http://www.econ.iastate.edu
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Stephanie Bridges).

Related research
Keywords:

Other versions of this item:

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. Mason, Robin & Valentinyi, Ãkos, 2003. "Independence And Heterogeneity In Games Of Incomplete Information," Discussion Paper Series In Economics And Econometrics 0307, Economics Division, School of Social Sciences, University of Southampton. [Downloadable!]
    Other versions:
  2. Eugen Kovac & Jakub Steiner, 2008. "Reversibility in Dynamic Coordination Problems," ESE Discussion Papers 183, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
    Other versions:
  3. Angelo Antoci & Massimiliano Landi & Pier Luigi Sacco, 2006. "Expectations, Animal Spirits, and Evolutionary Dynamics," Working Papers 10-2006, Singapore Management University, School of Economics. [Downloadable!]
  4. Angelo Antoci & Antonio Gay & Massimiliano Landi & Pier Luigi Sacco, 2007. "Global Analysis of an Expectations Augmented Evolutionary Dynamics," Working Papers 25-2007, Singapore Management University, School of Economics. [Downloadable!]
    Other versions:
  5. Larry Karp & In Ho Lee & Robin Mason, 2003. "A global game with strategic substitutes and complements," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 940, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
    Other versions:
  6. Flavio Toxvaerd & Chryssi Giannitsarou, 2004. "Recursive global games," Money Macro and Finance (MMF) Research Group Conference 2003 104, Money Macro and Finance Research Group. [Downloadable!]
    Other versions:
  7. Barton L. Lipman & Ruqu Wang, 1997. "Switching Costs in Frequently Repeated Games," Discussion Papers 1190, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  8. Stephen Morris & Hyun Song Shin, 2003. "Heterogeneity and Uniqueness in Interaction Games," Cowles Foundation Discussion Papers 1402, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  9. Robin Mason & Akos Valentinyi, 2003. "Independence, Heterogeneity and Uniqueness in Interaction Games," IEHAS Discussion Papers 0303, Institute of Economics, Hungarian Academy of Sciences. [Downloadable!]
  10. Antonio Cabrales & Rosemarie Nagel & Roc Armenter, 2007. "Equilibrium selection through incomplete information in coordination games: an experimental study," Experimental Economics, Springer, vol. 10(3), pages 221-234, September. [Downloadable!] (restricted)
    Other versions:
  11. David M. Frankel & Stephen Morris & Ady Pauzner, 2001. "Equilibrium Selection in Global Games with Strategic Complementarities," Cowles Foundation Discussion Papers 1336, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  12. Stephen Morris & Hyun Song Shin, 2000. "Global Games: Theory and Applications," Cowles Foundation Discussion Papers 1275R, Cowles Foundation, Yale University, revised Aug 2001. [Downloadable!]
    Other versions:
  13. Akihiko Matsui & Daisuke Oyama, 2002. "Rationalizable Foresight Dynamics: Evolution and Rationalizability," Vienna Economics Papers 0302, University of Vienna, Department of Economics. [Downloadable!]
  14. In-Ho Lee & Robin Mason, 2002. "Coordination in the static and the dynamic," Levine's Working Paper Archive 391749000000000503, David K. Levine. [Downloadable!]
  15. In Ho Lee & Robin Mason, 2003. "Coordination in the Static and the Dynamic," Levine's Bibliography 506439000000000161, UCLA Department of Economics. [Downloadable!]
  16. repec:bep:theadv:v:5:y:2005:i:1:p:1140-1140 is not listed on IDEAS
  17. Jakub Steiner, 2006. "Coordination Cycles," ESE Discussion Papers 162, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
    Other versions:
  18. Darrell Duffie & Yeneng Sun, 2004. "The Exact Law of Large Numbers for Independent Random Matching," Levine's Bibliography 122247000000000328, UCLA Department of Economics. [Downloadable!]
Statistics
Access and download statistics

Did you know? Data contributors to RePEc receive monthly emails with details about downloads and abstract views of their works.

This page was last updated on 2009-11-21.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.