Sampling dynamics applied to the traveler's dilemma reveals non-Nash behavior

Rainer Berkemer, Jens Starke and Atsushi Kawamoto

Games and Economic Behavior, 2023, vol. 142, issue C, 339-356

Abstract: The traveler's dilemma is characterized by a strict Nash equilibrium that is Pareto-inefficient. Even though a coordinated choice of more efficient options would be preferred by both players, any individual deviation from Nash behavior will induce a lower payoff. Yet experimental behavior reported in the literature demonstrates that deviations from Nash behavior toward Pareto-better outcomes are typical. An application of the sampling dynamics to this dilemma further justifies the non-Nash behavior. Due to the fact, that the sampling dynamics is not payoff-monotonic, even dominated strategies can survive the selection process. It is shown that for a generalized traveler's dilemma an interior equilibrium attracts almost all trajectories, given that there are sufficiently many options. The limit for infinitely many options is derived.

Keywords: Evolutionary game theory; Learning; Social dilemma; Nonlinear dynamics; Selection processes; Best experienced payoff dynamics (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:142:y:2023:i:c:p:339-356

DOI: 10.1016/j.geb.2023.08.008

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