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Logit Solution and Equilibrium Selection in Two-Person Games

Author

Listed:
  • Kang-Oh Yi

    (Sogang University)

Abstract

This paper studies the properties of logit solution as a limit of logit equilibrium, where mistake probabilities depend in plausible ways on their expected costs. This dependence sometimes allows logit solution to select an equilibrium that differs from the risk-dominant equilibrium in 2��2 games. This paper also identifies a sufficient condition for logit solution to follow risk-dominance in 2��2 games.

Suggested Citation

  • Kang-Oh Yi, 2009. "Logit Solution and Equilibrium Selection in Two-Person Games," Korean Economic Review, Korean Economic Association, vol. 25, pages 289-298.
    • Handle: RePEc:kea:keappr:ker-20091231-25-2-05
    as

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    File URL: http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-20091231-25-2-05.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Quantal Response Equilibrium; Logit Solution; Equilibrium Selection;
    All these keywords.

    JEL classification:

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

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