Equilibrium selection in coordination games with simultaneous play

Per Svejstrup Hansen () and Oddvar Kaarboe ()
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Per Svejstrup Hansen: Unit of Economics, The Royal Veterinary and Agricultural University, Frederiksberg, DENMARK

Economic Theory, 2002, vol. 20, issue 4, 793-807

Abstract: We apply the dynamic stochastic framework proposed in recent evolutionary literature to a class of coordination games played simultaneously by the entire population. In these games payoffs, and hence best replies, are determined by a summary statistic of the population strategy profile. We demonstrate that with simultaneous play, the equilibrium selection depends crucially on how best responses to the summary statistic remain piece-wise constant. In fact, all the strict Nash equilibria in the underlying stage game can be made stochastically stable depending on how the best response mapping generates piece-wise constant best responses.

Keywords: Coordination; Equilibrium selection; Market games. (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Date: 2002-03-21
Note: Received: February 12, 2001; revised version: October 29, 2001
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Citations: View citations in EconPapers (6)

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