Incomplete Information, Dynamic Stability and the Evolution of Preferences: Two Examples

Jean Paul Rabanal () and Daniel Friedman

Santa Cruz Department of Economics, Working Paper Series from Department of Economics, UC Santa Cruz

Abstract: We illustrate general techniques for assessing dynamic stability in games of incomplete information by re-analyzing two models of preference evolution, the Arce (Econ. Inq. 45(4):708–720, 2007) Employer–Worker game and the Friedman and Singh (Games Econ. Behav. 66:813–829, 2009) Noisy Trust game. The techniques include extensions of replicator and gradient dynamics, and for both models they confirm local stability of the key static equilibria. That is, we obtain convergence in time average for initial conditions sufficiently near equilibrium values.

Keywords: Clinical Research; Stability; Perfect Bayesian equilibrium; Evolutionary dynamics; Perfect Bayesian Equilibrium; evolutionary dynamics; Applied Mathematics; Numerical and Computational Mathematics (search for similar items in EconPapers)
Date: 2014-12-01
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Citations: View citations in EconPapers (5)

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Journal Article: Incomplete Information, Dynamic Stability and the Evolution of Preferences: Two Examples (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cdl:ucscec:qt4nx5s4h8

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