Quantal Response Equilibrium with Non-Monotone Probabilities: A Dynamic Approach

Suren Basov

No 880, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: Abstract In this paper I will give an example of a population game and of a locally improving stochastic learning process such that the quantal response equilibrium assigns to the different strategies the probabilities that are non-monotone in the payoffs. Moreover, if the initial state probabilities are payoff-monotone, then the learning can be shown the shrink mistakes in one direction and exacerbate them in the other direction.

Keywords: quantal response equilibrium; dynamic probabilistic choice models (search for similar items in EconPapers)
JEL-codes: C7 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2003
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