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Stochastic adaptation in finite games played by heterogeneous populations

Listed author(s):
  • Josephson, Jens

We analyze stochastic adaptation in finite n-player games played by heterogeneous populations containing best repliers, better repliers, and imitators. Individuals select strategies by applying a personal learning rule to a sample from a finite history of past play. We give sufficient conditions for convergence to minimal closed sets under better replies and selection of a Pareto dominant such set. Finally, we demonstrate that the stochastically stable states are sensitive to the sample size by showing convergence to the risk-dominant equilibrium for sufficiently small sample size and to the Pareto-dominant equilibrium for sufficiently large sample size in 2x2 coordination games.

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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 33 (2009)
Issue (Month): 8 (August)
Pages: 1543-1554

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Handle: RePEc:eee:dyncon:v:33:y:2009:i:8:p:1543-1554
Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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