Adjustment Dynamics and Rational Play in Games
When a strategic situation arises repeatedly, the possibility arises that equilibrium predictions can be justified by a dynamic adjustment process. We examine myopic adjustment dynamics, a class that includes replicator dynamics from evolutionary game theory, simple models of imitation, models of experimentation and adjustment, and some simple learning dynamics. We present a series of theorems showing conditions under which behavior that is asymptotically stable under some such dynamic is strategically stable (Kohlberg and Mertens ). This behavior is thus as if the agents in the economy satisfied the extremely stringent assumptions that game theory traditionally makes about rationality and beliefs.
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- KOHLBERG, Elon & MERTENS, Jean-FranÃ§ois, .
"On the strategic stability of equilibria,"
CORE Discussion Papers RP
716, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- David M Kreps & Robert Wilson, 2003.
Levine's Working Paper Archive
618897000000000813, David K. Levine.
- Swinkels, J., 1991.
"Evolutionary Stability with Equilibrium Entrants,"
9, Stanford - Institute for Thoretical Economics.
- Hillas, John, 1990. "On the Definition of the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 58(6), pages 1365-90, November.
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