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Escape dynamics and equilibria selection by iterative cycle decomposition

  • Cui, Zhiwei
  • Zhai, Jian

This paper explores the medium-run behaviour of bounded rational players in repeatedly played games when they occasionally experiment or make mistakes. The formal analysis introduces a hierarchical structure of limit sets to characterize the most possible medium-run behaviour over gradually increased time intervals. The paper refines the notion of stochastic stability and offers a precise measure of the speed at which stochastically stable equilibria occur. Finally, the paper applies the results to a 3x3 symmetric game of Young (1993).

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File URL: http://www.sciencedirect.com/science/article/pii/S0304-4068(09)00143-8
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Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 46 (2010)
Issue (Month): 6 (November)
Pages: 1015-1029

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Handle: RePEc:eee:mateco:v:46:y:2010:i:6:p:1015-1029
Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

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  1. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  2. P. Young, 1999. "The Evolution of Conventions," Levine's Working Paper Archive 485, David K. Levine.
  3. M. Kandori & G. Mailath & R. Rob, 1999. "Learning, Mutation and Long Run Equilibria in Games," Levine's Working Paper Archive 500, David K. Levine.
  4. D. Foster & P. Young, 2010. "Stochastic Evolutionary Game Dynamics," Levine's Working Paper Archive 493, David K. Levine.
  5. Jeffrey C. Ely, 2002. "Local Conventions," Discussion Papers 1349, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. M. Kandori & R. Rob, 2010. "Evolution of Equilibria in the Long Run: A General Theory and Applications," Levine's Working Paper Archive 502, David K. Levine.
  7. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, March.
  8. Samuelson Larry, 1994. "Stochastic Stability in Games with Alternative Best Replies," Journal of Economic Theory, Elsevier, vol. 64(1), pages 35-65, October.
  9. James Bergin & B. L. Lipman, 1994. "Evolution with state-dependent mutations," Working Papers 199411, School of Economics, University College Dublin.
  10. Young, H. Peyton, 2006. "Social Dynamics: TheorY AND Applications," Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 22, pages 1081-1108 Elsevier.
  11. Drew Fudenberg & Lorens A. Imhof, 2004. "Imitation Processes with Small Mutations," Harvard Institute of Economic Research Working Papers 2050, Harvard - Institute of Economic Research.
  12. Sanjeev Goyal & Fernando Vega-Redondo, 2003. "Network Formation and Social Coordination," Working Papers 481, Queen Mary University of London, School of Economics and Finance.
  13. Noeldecke,Georg & Samuelson,Larry, . "An evolutionary analysis of backward and forward induction," Discussion Paper Serie B 228, University of Bonn, Germany.
  14. Alan Beggs, 2005. "Waiting times and equilibrium selection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(3), pages 599-628, 04.
  15. Ely Jeffrey C, 2002. "Local Conventions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 2(1), pages 1-32, May.
  16. Glen Ellison, 2010. "Learning, Local Interaction, and Coordination," Levine's Working Paper Archive 391, David K. Levine.
  17. Levine, David K. & Fudenberg, Drew, 2009. "Learning and Equilibrium," Scholarly Articles 4382413, Harvard University Department of Economics.
  18. Jeffrey Ely, 2010. "Local Conventions," Levine's Working Paper Archive 492, David K. Levine.
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