Stable Observable Behavior

Yuval Heller and Erik Mohlin ()

MPRA Paper from University Library of Munich, Germany

Abstract: We study stable behavior when players are randomly matched to play a game, and before the game begins each player may observe how his partner behaved in a few interactions in the past. We present a novel modeling approach and we show that strict Nash equilibria are always stable in such environments. We apply the model to study the Prisoner's Dilemma. We show that if players only observe past actions, then defection is the unique stable outcome. However, if players are able to observe past action profiles, then cooperation is also stable. Finally, we present extensions that study endogenous observation probabilities and the evolution of preferences.

Keywords: Evolutionary stability; random matching; indirect reciprocity; secret handshake; submodularity; image scoring. (search for similar items in EconPapers)
JEL-codes: C72 C73 D01 (search for similar items in EconPapers)
Date: 2015-03-19
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-gth, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/63013/1/MPRA_paper_63013.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/66176/1/MPRA_paper_66176.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/70720/1/MPRA_paper_70720.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/76573/1/MPRA_paper_76573.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/79882/1/MPRA_paper_79882.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/82740/1/MPRA_paper_82740.pdf revised version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:63013

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().