EVOLUTIONARY DRIFT AND EQUILIBRIUM SELECTION

Ken Binmore and Larry Samuelson

ELSE working papers from ESRC Centre on Economics Learning and Social Evolution

Abstract: This paper develops an approach to equilibrium selection in game theory based on studying the learning process through which equilibrium is achieved. The differential equations derived frommodels of interactive learn-ing typically have stationary states that are not isolated. Instead, Nash equilibria that specify different out-of-equilibrium behavior appear in con-nected components of stationary states. The stability properties of these components can depend critically on the perturbations to which the system is subjected. We argue that it is then important to incorporate such drift into the model. A sufficient condition is provided for drift to create stationary states, with strong stability properties, near a component of equilibria. Applications to questions of forward and backward induction are developed.

Keywords: Evolutionary Games; Cheap Talk; Stability; Drift (search for similar items in EconPapers)
JEL-codes: C70 C72 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (98)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:els:esrcls:049

Access Statistics for this paper

More papers in ELSE working papers from ESRC Centre on Economics Learning and Social Evolution Contact information at EDIRC.
Bibliographic data for series maintained by s. malkani ( this e-mail address is bad, please contact ).