One approach to the modeling of bounded rationality in strategic environments is based on the dynamics of evolution and learning in games. An entirely different approach has been developed recently by Osborne and Rubinstein (1998). This latter approach is static and equilibrium based, but relies on less stringent assumptions regarding the knowledge and understanding of players than does the standard theory of Nash equilibrium. This paper formalizes Osborne and Rubinstein's dynamic interpretation of their equilibrium concept and thereby facilitates a comparison of this approach with the explicitly dynamic approach of evolutionary game theory. It turns out that the two approaches give rise to radically different static and dynamic predictions. For instance, dynamically stable equilibria can involve the playing of strictly dominated actions, and equilibria in which strictly actions are played with probability 1 can be unstable. Sufficient conditions for the instability of equilibria are provided for symmetric and asymmetric games.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Length: 23 pages Date of creation: 16 Nov 1998 Date of revision:
04 Mar 1999 Handle: RePEc:wpa:wuwpga:9811003
Note: Type of Document - Tex; prepared on IBM PC; to print on HP/PostScript; pages: 23; figures: included Contact details of provider: Web page: http://129.3.20.41
For technical questions regarding this item, or to correct its listing, contact: (EconWPA).
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
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.)