A Dynamic Homotopy Interpretation of Quantal Response Equilibrium Correspondences

Game Theory and Information from EconWPA

Abstract: This paper uses properties of the logistic quantal response equilibrium correspondence to compute Nash equilibria in nite games. It is shown that branches of the correspondence may be numerically traversed e ciently and securely. The method can be implemented on a multicomputer, allowing for application to large games. The path followed by the method has an interpretation analogous to Harsanyi and Selten's Tracing Procedure. As an application, it is shown that the principal branch of any quantal response equilibrium correspondence satisfying a monotonicity property converges to the risk-dominant equilibrium in 2x2 games.

Keywords: noncooperative games; computation of Nash equilibrium; quantal response; logit equilibrium. (search for similar items in EconPapers)
JEL-codes: C72 C88 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: Written 2002-12-02
Note: Type of Document - PDF; prepared on Linux; pages: 26 ; figures: none
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpga:0212001

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