An extension of quantal response equilibrium and determination of perfect equilibrium

Yin Chen and Chuangyin Dang

Games and Economic Behavior, 2020, vol. 124, issue C, 659-670

Abstract: As a strict refinement of Nash equilibrium, the concept of perfect equilibrium was formulated and extensively studied in the literature. To determine perfect equilibrium, this paper extends the logistic version of quantal response equilibrium (logit QRE) to a perturbed game. As a result of this extension, a smooth path is constructed for determining perfect equilibrium. The path starts from an arbitrary totally mixed strategy profile and leads to a perfect equilibrium. Numerical examples show that the extended QRE is comparable with the logit QRE and further confirm the effectiveness of the path.

Keywords: Noncooperative game; Nash equilibrium; Perfect equilibrium; Quantal response equilibrium; Smooth path (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:124:y:2020:i:c:p:659-670

DOI: 10.1016/j.geb.2017.12.023

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