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An extension of quantal response equilibrium and determination of perfect equilibrium

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  • Chen, Yin
  • Dang, Chuangyin

Abstract

As a strict refinement of Nash equilibrium, the concept of perfect equilibrium was formulated and extensively studied in the literature. To determine perfect equilibrium, this paper extends the logistic version of quantal response equilibrium (logit QRE) to a perturbed game. As a result of this extension, a smooth path is constructed for determining perfect equilibrium. The path starts from an arbitrary totally mixed strategy profile and leads to a perfect equilibrium. Numerical examples show that the extended QRE is comparable with the logit QRE and further confirm the effectiveness of the path.

Suggested Citation

  • Chen, Yin & Dang, Chuangyin, 2020. "An extension of quantal response equilibrium and determination of perfect equilibrium," Games and Economic Behavior, Elsevier, vol. 124(C), pages 659-670.
    • Handle: RePEc:eee:gamebe:v:124:y:2020:i:c:p:659-670
    DOI: 10.1016/j.geb.2017.12.023
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    References listed on IDEAS

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    Cited by:

    1. Yiyin Cao & Chuangyin Dang & Yabin Sun, 2022. "Complementarity Enhanced Nash’s Mappings and Differentiable Homotopy Methods to Select Perfect Equilibria," Journal of Optimization Theory and Applications, Springer, vol. 192(2), pages 533-563, February.
    2. Cao, Yiyin & Dang, Chuangyin, 2022. "A variant of Harsanyi's tracing procedures to select a perfect equilibrium in normal form games," Games and Economic Behavior, Elsevier, vol. 134(C), pages 127-150.

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    More about this item

    Keywords

    Noncooperative game; Nash equilibrium; Perfect equilibrium; Quantal response equilibrium; Smooth path;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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