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Reputation By Imitation: An Evolutionary Model With Strategic Matching

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  • THIERRY VIGNOLO

    (European University Institute, Economic Department, Villa San Paolo, Via della Piazzuola 43, I-50133 Firenze, Italy)

Abstract

This paper shows howstrategic matchinggenerates reputation-building behavior in an evolutionary chain-store game.Strategic matchingmeans the possibility for an entrant to choose in a strategic way the local market into which it will move. Players are boundedly rational and follow behavioral rules simply requiring that the frequency of any strategy enjoying the highest payoff should never decrease. In preventing the random entries in markets of "fighting monopolists",strategic matchingreinforces the reputation effects. Using the bounded rationality set-up offered by evolutionary game theory, the paper follows Selten (1978)'s intuition underlying the necessity of a limited rationality approach in order to capture reputation effects.

Suggested Citation

  • Thierry Vignolo, 2006. "Reputation By Imitation: An Evolutionary Model With Strategic Matching," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 8(03), pages 417-428.
    • Handle: RePEc:wsi:igtrxx:v:08:y:2006:i:03:n:s0219198906000990
    DOI: 10.1142/S0219198906000990
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    References listed on IDEAS

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    More about this item

    Keywords

    Evolutionary game theory; matching processes; reputation; chain-store game; JEL Classification Number: C72; JEL Classification Number: C73; JEL Classification Number: L1;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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