Local contraction-stability and uniqueness

Andreas M. Hefti

No 112, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: This paper investigates the relationship between uniqueness of Nash equilibria and local stability with respect to the best-response dynamics in the cases of sum-aggregative and symmetric games. If strategies are equilibrium complements, local stability and uniqueness are the same formal properties of the game. With equilibrium substitutes, local stability is stronger than uniqueness. If players adjust sequentially rather than simultaneously, this tends towards making a symmetric equilibria of symmetric games more stable. Finally, the relationship between the stability of the Nash best-response dynamics is compared to the stability of the response-dynamics induced by aggregate-taking behavior.

Keywords: Contraction mapping; stability; uniqueness; aggregate-taking behavior; dominance solvability; symmetric games (search for similar items in EconPapers)
JEL-codes: C72 D43 L13 (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:zur:econwp:112

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