Muddling Through: Noisy Equilibrium Selection
We examine an evolutionary model in which the primary source of "noise" that moves the model between equilibria is not random, arbitrarily improbable mutations but mistakes in learning. We find conditions under which the payoff-dominant equilibrium in a 2x2 game is selected by the model as well as conditions under which the risk-dominant equlibrium is selected. The relevant risk-dominance considerations, however, arise not in the original game but in a "fitness game" derived from the process by which payoffs in the original game are translated into evolutionary fitnesses. We also find that waiting times until the limiting distribution is reached can be shorter than in a mutation-driven model. To explore the robustness of the results to the specification of the model, we present a number of comparative static results as well as a "two-tiered" evolutionary model in which the rules by which agents learn to play the game are themselves subject to evolutionary pressure.
|Date of creation:||26 Oct 1994|
|Date of revision:|
|Note:||Three tex files; use kbmacros and larrybib in muddle.|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Glen Ellison, 2010.
"Learning, Local Interaction, and Coordination,"
Levine's Working Paper Archive
391, David K. Levine.
- Noldeke Georg & Samuelson Larry, 1993.
"An Evolutionary Analysis of Backward and Forward Induction,"
Games and Economic Behavior,
Elsevier, vol. 5(3), pages 425-454, July.
- G. Noldeke & L. Samuelson, 2010. "An Evolutionary Analysis of Backward and Forward Induction," Levine's Working Paper Archive 538, David K. Levine.
- Noeldecke,Georg & Samuelson,Larry, . "An evolutionary analysis of backward and forward induction," Discussion Paper Serie B 228, University of Bonn, Germany.
- Hans Carlsson & Eric van Damme, 1993.
"Global Games and Equilibrium Selection,"
Levine's Working Paper Archive
122247000000001088, David K. Levine.
- Carlsson, H. & van Damme, E.E.C., 1993. "Global games and equilibrium selection," Other publications TiSEM 49a54f00-dcec-4fc1-9488-4, Tilburg University, School of Economics and Management.
- Carlsson, H. & Van Damme, E., 1990. "Global Games And Equilibrium Selection," Papers 9052, Tilburg - Center for Economic Research.
- Carlsson, H. & van Damme, E.E.C., 1990. "Global games and equilibrium selection," Discussion Paper 1990-52, Tilburg University, Center for Economic Research.
- Ellison, Glenn & Fudenberg, Drew, 1992.
"Rules of Thumb for Social Learning,"
IDEI Working Papers
17, Institut d'Économie Industrielle (IDEI), Toulouse.
- Allison, G. & Fudenberg, D., 1992. "Rules of Thumb for Social Learning," Working papers 92-12, Massachusetts Institute of Technology (MIT), Department of Economics.
- G. Ellison & D. Fudenberg, 2010. "Rules of Thumb for Social Learning," Levine's Working Paper Archive 435, David K. Levine.
- Ellison, Glenn & Fudenberg, Drew, 1993. "Rules of Thumb for Social Learning," Scholarly Articles 3196332, Harvard University Department of Economics.
- Bagnoli, M. & Bergstrom, T., 1989.
"Log-Concave Probability And Its Applications,"
89-23, Michigan - Center for Research on Economic & Social Theory.
- Binmore, K. & Samuelson, L. & Vaughan, R., 1993. "Musical Chairs: Modelling Noisy Evolution," Working papers 9324, Wisconsin Madison - Social Systems.
- Itzhak Gilboa & David Schmeidler, 1993.
1039, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Binmore, K. & Samuelson, L., 1993. "An Economist's Perspective on the Evolution of Norms," Working papers 9323, Wisconsin Madison - Social Systems.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpga:9410002. 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: (EconWPA)
If references are entirely missing, you can add them using this form.