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Robust stochastic stability

  • Carlos Alós–Ferrer
  • Nick Netzer

A strategy profile of a game is called robustly stochastically stable if it is stochastically stable for a given behavioral model independently of the specification of revision opportunities and tie-breaking assumptions in the dynamics. We provide a simple radius-coradius result for robust stochastic stability and examine several applications. For the logit-response dynamics, the selection of potential maximizers is robust for the subclass of supermodular symmetric binary-action games. For the mistakes model, the weaker property of strategic complementarity suffices for robustness in this class of games. We also investigate the robustness of the selection of risk-dominant strategies in coordination games under best-reply and the selection of Walrasian strategies in aggregative games under imitation.

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Paper provided by Department of Economics - University of Zurich in its series ECON - Working Papers with number 063.

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Date of creation: Feb 2012
Date of revision: Jan 2014
Handle: RePEc:zur:econwp:063
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