Payoff-dependent dynamics and coordination games

Sung-Ha Hwang and Jonathan Newton

Economic Theory, 2017, vol. 64, issue 3, No 7, 589-604

Abstract: Abstract This paper considers populations of agents whose behavior when playing some underlying game is governed by perturbed best (or better) response dynamics with perturbation probabilities that depend log-linearly on payoffs, a class that includes the logit choice rule. A convention is a state at which every agent plays a strategy that corresponds to the same strict Nash equilibrium of the underlying game. For coordination games with zero payoff off-diagonal, it is shown that the difficulty of leaving the basin of attraction of a convention can be well approximated by only considering paths of transitions on which an identical perturbation repeatedly affects one of the populations.

Keywords: Evolution; Coordination; Logit; Payoff dependence (search for similar items in EconPapers)
JEL-codes: C73 C78 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (13)

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Working Paper: Payoff Dependent Dynamics and Coordination Games (2016)
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DOI: 10.1007/s00199-016-0988-x

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