Escape dynamics and equilibria selection by iterative cycle decomposition

Zhiwei Cui and Jian Zhai

Journal of Mathematical Economics, 2010, vol. 46, issue 6, 1015-1029

Abstract: This paper explores the medium-run behaviour of bounded rational players in repeatedly played games when they occasionally experiment or make mistakes. The formal analysis introduces a hierarchical structure of limit sets to characterize the most possible medium-run behaviour over gradually increased time intervals. The paper refines the notion of stochastic stability and offers a precise measure of the speed at which stochastically stable equilibria occur. Finally, the paper applies the results to a 3x3 symmetric game of Young (1993).

Keywords: Adaptive; learning; dynamics; in; games; Escape; dynamics; Iterative; cycle; decomposition; Stochastic; stability (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:46:y:2010:i:6:p:1015-1029

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