Games between responsive behavioural rules
MPRA Paper from University Library of Munich, Germany
I study recurrent strategic interaction between two responsive behavioural rules in generic bi-matrix weakly acyclic games. The two individuals that play the game in a particular period choose their strategy by responding to a sample of strategies used by the co-players in the recent history of play. The response of a player is determined by his behavioural rule. I show that the game reaches a convention whenever the behavioural rule of each player is `weakly responsive' to the manner in which strategies were chosen in the past by the co-players, and stays locked into the convention if the behavioural rules are `mildly responsive'. Furthermore, amongst `mildly responsive' behavioural rules, individuals described by the behavioural rule of `extreme optimism' perform the best in the sense that their most preferred convention is always in the stochastically stable set; under an additional mild restriction that differentiates the behavioural rule of the other player from extreme optimism, the convention referred to above is the unique stochastically stable state.
Keywords: evolution of conventions; behavioural rules; weakly responsive; mildly responsive; optimism (search for similar items in EconPapers)
JEL-codes: C73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-gth
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