On the Stability of CSS under the Replicator Dynamic
This paper considers a two-player game with a one-dimensional continuous strategy. We study the asymptotic stability of equilibria under the replicator dynamic when the support of the initial population is an interval. We find that, under strategic complementarities, Continuously Stable Strategy (CSS) have the desired convergence properties using an iterated dominance argument. For general games, however, CSS can be unstable even for populations that have a continuous support. We present a sufficient condition for convergence based on elimination of iteratively dominated strategies. This condition is more restrictive than CSS in general but equivalent in the case of strategic complementarities. Finally, we offer several economic applications of our results.
|Date of creation:||Jul 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.imw.uni-bielefeld.de/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:bie:wpaper:436. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dr. Frederik Herzberg)
If references are entirely missing, you can add them using this form.