EconPapers    
Economics at your fingertips  
 

Equilibrium Selection with Payoff-Dependent Mistakes

Kang-Oh Yi ()
Additional contact information
Kang-Oh Yi: Department of Economics, Sogang University, Seoul

No 1115, Working Papers from Research Institute for Market Economy, Sogang University

Abstract: This paper studies equilibrium selection via stochastic dynamics in the style of Young (Econometrica 61, 1993, 57-84), when the mistake probabilities are allowed to depend on their expected payoffs. Although any strict equilibrium can be selected with properly constructed state-dependent mistakes (Bergin and Lipman, Econometrica, 64, 1996, 943-956), reasonable assumptions on state dependence could produce a consistent equilibrium selection. The main analysis shows how payoff dependency and payoffs interact to determine a long-run equilibrium and characterizes the selection relating to the traditional notions of risk dominance, payoff dominance, and maxmin in 2x2 games

Keywords: Equilibrium selection; stochastic stability; coordination game; payoff dependent mistake (search for similar items in EconPapers)
JEL-codes: C70 C72 D70 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth, nep-mic and nep-ore
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
ftp://163.239.156.99/wpaper/YKO_RIME_2011-15.pdf First version, 2011 (application/pdf)

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:sgo:wpaper:1115

Access Statistics for this paper

More papers in Working Papers from Research Institute for Market Economy, Sogang University Contact information at EDIRC.
Bibliographic data for series maintained by Jung Hur ().

 
Page updated 2019-10-11
Handle: RePEc:sgo:wpaper:1115