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Epsilon-stability and the speed of learning in network games

Author

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  • Azomahou, T.

    () (UNU-MERIT)

  • Opolot, D.

    () (UNU-MERIT)

Abstract

This paper introduces epsilon-stability as a generalization of the concept of stochastic stability in learning and evolutionary game dynamics. An outcome of a model of stochastic evolutionary dynamics is said to be epsilon-stable in the long-run if for a given model of mistakes it maximizes its invariant distribution. We construct an efficient algorithm for computing epsilon-stable outcomes and provide conditions under which epsilon-stability can be approximated by stochastic stability. We also define and provide tighter bounds for contagion rate and metastability as measures for characterizing the short-run and medium-run behaviour of a typical stochastic evolutionary model.

Suggested Citation

  • Azomahou, T. & Opolot, D., 2014. "Epsilon-stability and the speed of learning in network games," MERIT Working Papers 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2014036
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    File URL: https://www.merit.unu.edu/publications/wppdf/2014/wp2014-036.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lim, Wooyoung & Neary, Philip R., 2016. "An experimental investigation of stochastic adjustment dynamics," Games and Economic Behavior, Elsevier, vol. 100(C), pages 208-219.

    More about this item

    Keywords

    Learning; Innovation; Stochastic evolution; network games; epsilon-stable sets; expected waiting time; metastability; contagion rate;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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