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Learning to Play Approximate Nash Equilibria in Games with Many Players

  • Edward Cartwright

    (Department of Economics, University of Warwick)

We illustrate one way in which a population of boundedly rational individuals can learn to play an approximate Nash equilibrium. Players are assumed to make strategy choices using a combination of imitation and innovation. We begin by looking at an imitation dynamic and provide conditions under which play evolves to an imitation equilibrium; convergence is conditional on the network of social interaction. We then illustrate, through example, how imitation and innovation can complement each other; in particular, we demonstrate how imitation can .help. a population to learn to play a Nash equilibrium where more rational methods do not. This leads to our main result in which we provide a general class of large game for which the imitation with innovation dynamic almost surely converges to an approximate Nash, imitation equilibrium.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.85.

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Date of creation: May 2004
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Handle: RePEc:fem:femwpa:2004.85
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