Quantal response methods for equilibrium selection in 2×2 coordination games

Boyu Zhang and Josef Hofbauer

Games and Economic Behavior, 2016, vol. 97, issue C, 19-31

Abstract: The notion of quantal response equilibrium (QRE), introduced by McKelvey and Palfrey (1995), has been widely used to explain experimental data. In this paper, we use quantal response equilibrium as a homotopy method for equilibrium selection, and study this in detail for 2×2 bimatrix coordination games. We show that the risk dominant equilibrium need not be selected. In the logarithmic game, the limiting QRE is the Nash equilibrium with the larger sum of square root payoffs. Finally, we apply the quantal response methods to the mini public goods game with punishment. A cooperative equilibrium can be selected if punishment is strong enough.

Keywords: Quantal response equilibrium; Equilibrium selection; Logit equilibrium; Logarithmic game; Punishment (search for similar items in EconPapers)
JEL-codes: C61 C73 D58 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825616000385
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:97:y:2016:i:c:p:19-31

DOI: 10.1016/j.geb.2016.03.002

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().