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Payoff Dependent Dynamics and Coordination Games

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  • Hwang, Sung-Ha
  • Newton, Jonathan

Abstract

This paper considers populations of agents whose behavior when playing some underlying game is governed by perturbed best (or better) response dynamics with perturbation probabilities that depend log-linearly on payoffs, a class that includes the logit choice rule. A convention is a state at which every agent plays a strategy that corresponds to the same strict Nash equilibrium of the underlying game. For coordination games with zero payoffs off-diagonal, it is shown that the difficulty of leaving the basin of attraction of a convention can be well approximated by only considering paths of transitions on which an identical perturbation repeatedly affects one of the populations.

Suggested Citation

  • Hwang, Sung-Ha & Newton, Jonathan, 2016. "Payoff Dependent Dynamics and Coordination Games," Working Papers 2016-12, University of Sydney, School of Economics.
  • Handle: RePEc:syd:wpaper:2016-12
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    References listed on IDEAS

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    Cited by:

    1. Arigapudi, Srinivas, 2020. "Exit from equilibrium in coordination games under probit choice," Games and Economic Behavior, Elsevier, vol. 122(C), pages 168-202.
    2. Ennio Bilancini & Leonardo Boncinelli, 2020. "The evolution of conventions under condition-dependent mistakes," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(2), pages 497-521, March.
    3. Ennio Bilancini & Leonardo Boncinelli, 2018. "Social coordination with locally observable types," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 975-1009, June.
    4. Hwang, Sung-Ha & Lim, Wooyoung & Neary, Philip & Newton, Jonathan, 2018. "Conventional contracts, intentional behavior and logit choice: Equality without symmetry," Games and Economic Behavior, Elsevier, vol. 110(C), pages 273-294.
    5. Sawa, Ryoji, 2021. "A prospect theory Nash bargaining solution and its stochastic stability," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 692-711.
    6. Sawa, Ryoji & Wu, Jiabin, 2018. "Reference-dependent preferences, super-dominance and stochastic stability," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 96-104.
    7. Sawa, Ryoji & Wu, Jiabin, 2018. "Prospect dynamics and loss dominance," Games and Economic Behavior, Elsevier, vol. 112(C), pages 98-124.
    8. Hwang, Sung-Ha & Rey-Bellet, Luc, 2021. "Positive feedback in coordination games: Stochastic evolutionary dynamics and the logit choice rule," Games and Economic Behavior, Elsevier, vol. 126(C), pages 355-373.
    9. Jonathan Newton, 2018. "Evolutionary Game Theory: A Renaissance," Games, MDPI, Open Access Journal, vol. 9(2), pages 1-67, May.

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    More about this item

    Keywords

    Evolution; Coordination; Logit; Payoff dependence;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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