Local contraction-stability and uniqueness
AbstractThis paper investigates the relationship between uniqueness of Nash equilibria and local stability with respect to the best-response dynamics in the cases of sum-aggregative and symmetric games. If strategies are equilibrium complements, local stability and uniqueness are the same formal properties of the game. With equilibrium substitutes, local stability is stronger than uniqueness. If players adjust sequentially rather than simultaneously, this tends towards making a symmetric equilibria of symmetric games more stable. Finally, the relationship between the stability of the Nash best-response dynamics is compared to the stability of the response-dynamics induced by aggregate-taking behavior.
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Bibliographic InfoPaper provided by Department of Economics - University of Zurich in its series ECON - Working Papers with number 112.
Date of creation: Feb 2013
Date of revision:
Contraction mapping; stability; uniqueness; aggregate-taking behavior; dominance solvability; symmetric games;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-GTH-2013-03-02 (Game Theory)
- NEP-HPE-2013-03-02 (History & Philosophy of Economics)
- NEP-MIC-2013-03-02 (Microeconomics)
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