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Quantal Response Equilibrium with Non-Monotone Probabilities: A Dynamic Approach

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Author Info
Suren Basov

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Abstract

Abstract In this paper I will give an example of a population game and of a locally improving stochastic learning process such that the quantal response equilibrium assigns to the different strategies the probabilities that are non-monotone in the payoffs. Moreover, if the initial state probabilities are payoff-monotone, then the learning can be shown the shrink mistakes in one direction and exacerbate them in the other direction.

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File URL: http://www.economics.unimelb.edu.au/SITE/research/workingpapers/wp03/880.pdf
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Publisher Info
Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 880.

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Length: 13 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:mlb:wpaper:880

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Related research
Keywords: quantal response equilibrium; dynamic probabilistic choice models;

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Find related papers by JEL classification:
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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  1. Suren Basov, 2005. "Bounded rationality: static versus dynamic approaches," Economic Theory, Springer, vol. 25(4), pages 871-885, 06. [Downloadable!] (restricted)
  2. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer, vol. 1(1), pages 9-41, June. [Downloadable!] (restricted)
  3. Anderson, Simon P. & Goeree, Jacob K. & Holt, Charles A., 2001. "Minimum-Effort Coordination Games: Stochastic Potential and Logit Equilibrium," Games and Economic Behavior, Elsevier, vol. 34(2), pages 177-199, February. [Downloadable!] (restricted)
  4. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July. [Downloadable!] (restricted)
  5. Suren Basov, 2002. "Bounded Rationality: Static versus Dynamic Approach," Department of Economics - Working Papers Series 864, The University of Melbourne. [Downloadable!]
  6. Chen, Hsiao-Chi & Friedman, James W. & Thisse, Jacques-Francois, 1997. "Boundedly Rational Nash Equilibrium: A Probabilistic Choice Approach," Games and Economic Behavior, Elsevier, vol. 18(1), pages 32-54, January. [Downloadable!] (restricted)
  7. Simon P. Anderson & Jacob K. Goeree & Charles A. Holt, 1998. "Rent Seeking with Bounded Rationality: An Analysis of the All-Pay Auction," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 828-853, August. [Downloadable!] (restricted)
  8. Offerman, Theo & Schram, Arthur & Sonnemans, Joep, 1998. "Quantal response models in step-level public good games," European Journal of Political Economy, Elsevier, vol. 14(1), pages 89-100, February. [Downloadable!] (restricted)
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