Equilibrium Concepts for Social Interaction Models
Lawrence Blume and
Steven Durlauf
International Game Theory Review (IGTR), 2003, vol. 05, issue 03, 193-209
Abstract:
This paper describes the relationship between two different binary choice social interaction models. The Brock and Durlauf (2001) model is essentially a static Nash equilibrium model with random utility preferences. In the Blume (2003) model is a population game model similar to Blume (1993), Kandori, Mailath and Rob (1993) and Young (1993). We show that the equilibria of the Brock–Durlauf model are steady states of a differential equation which is a deterministic approximation of the sample-path behavior of Blume's model. Moreover, the limit distribution of this model clusters around a subset of the steady states when the population is large.
Keywords: Discrete choice models; Nash equilibrium; stochastic stability (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (50)
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DOI: 10.1142/S021919890300101X
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