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Long-run equilibria, dominated strategies, and local interactions

Simon Weidenholzer

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: The present note revisits a result by Kim and Wong (2010) showing that any strict Nash equilibrium of a coordination game can be supported as a long run equilibrium by properly adding dominated strategies. We show that in the circular city model of local interactions the selection of 1/2 -dominant strategies remains when adding strictly dominated strategies if interaction is decentral". Conversely, if the local interaction structure is central" by adding properly suited dominated strategies any equilibrium strategy of the original game can be supported as long run equilibrium. Classification- JEL: C72, D83

New Economics Papers: this item is included in nep-evo and nep-gth
Date: 2010-05
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Journal Article: Long-run equilibria, dominated strategies, and local interactions (2012) Downloads
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